
A ‘richcession’ may be underway
“In most depressions, unemployment rises more for lower-income groups,” said Tomas Philipson, a professor of public policy studies at the University of Chicago and preceding acting chair of the White House Council of Economic Advisers.
“Although we are not in an overall recession yet, the demand for and wages of lower-income cliques are outpacing higher-income groups.”
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The start of the year was plagued by waves of layoffs: Guvs announced plans to cut 481,906 jobs in the first seven months, up 203% from the 159,021 cuts for the year-earlier aeon, according to Challenger, Gray & Christmas, a global outplacement and business and executive coaching firm.
Some sectors, such as banking and tech, be enduring been particularly hard hit, and a series of Wall Street layoffs earlier this summer fueled fears that a dip still looms driven by those professional job losses.
But there still aren’t enough workers to fill free positions in the service industry and the unemployment rate remains near a 50-year low at just 3.5%.
What a ‘richcession’ means for consumers
“Depression is a loaded term,” said Jacob Channel, senior economist at LendingTree. “White-collar jobs might not be as plentiful as they were newest year, but they’re still around.”
And “at the end of the day, even if white-collar hiring does appear to be on the decline, that doesn’t foretell that the entire economy as a whole is struggling,” Channel said.
“On the contrary, most current data indicates that regard for numerous headwinds, the broader economy is doing remarkably well, all things considered,” he added.
But regardless of the country’s fiscal standing, many Americans are feeling the pain of higher prices and most have exhausted their savings and are now sympathy on credit cards to make ends meet.
Several reports show financial well-being is deteriorating. Rather than a “richcession,” this assorted closely resembles a so-called K-shaped recovery, said Greg McBride, Bankrate.com’s chief financial analyst.
Moneyed Americans aren’t exactly suffering, but credit card debt is at an all-time high and 61% of adults are living paycheck to paycheck. “Those are posters of financial strain,” he said.
However this economic period is ultimately defined, it will only be in hindsight, McBride remarked. “Typically, by the time a recession is declared, the recovery is underway.”