Most of the economic news these days is not great: high unemployment, a drop in GDP that brought the US economy’s longest period of expansion to a screeching halt, and of course, the neverending ups and downs of the stock market. Though media sources have already started reporting on “the coronavirus recession” and we’re all feeling the effects of business closures and supply chain disruptions, we’re not technically in a recession. The reason comes down to how we measure economic performance. On today’s episode, we’ll be talking about economic indicators, what a recession is, and why official definitions don’t always match up with our lived experience. We’ll also be discussing some ways to weather an economic downturn, recession declaration or no. We can’t promise to alleviate any concerns you may have about the economy or tell you what to expect in the coming months or years, but we’ll try to provide some actions that you can take in the present.
Note: we recorded this podcast in early April, just after the opening of the Paycheck Protection Program and the passage of the CARES Act, so you may hear references to dates that have already come and gone. As of this writing, though, we’re still following the roll out of the second round of the PPP, continued disbursement of EIDL loans and economic impact payments, and like everyone else, trying to be as prepared as we can for what comes next.
Show notes and bonus content below the cut:
Mentioned on the show:
- The global economy has entered a synchronized slowdown
- Why are we talking about a recession? Economists weigh in
- 12 possible causes of a recession
- Investopedia: Recession and GDP (definition)
- What is the difference between a recession and a depression?
- NBER business cycle tracking and how the NBER defines a recession
- What is the business cycle?
- This is the factor that will be likely to determine if there’s a recession in the US
- Here’s how many recessions the average adult in the US has lived through
- What is an overheated economy?
- How will a recession affect me and what can I do to prepare for it?
- How do recessions impact businesses?
- How the Great Recession Impacted American Workers?
- 3 ways the Great Recession turned America’s student loan problem into a $1.3 trillion crisis
- Economic scarring: the long-term impacts of Recession
- Economic recession long-term fears by generation [Infographic]
- From Emyth: Now is the time for systems
- Failing Economy, Failing Health: The Great Recession’s Toll on Mind and Body
- How to Build a Community that Lifts You and Your Business to New Heights
- Information from the IRS about handling bartering income
- On realistic optimism
- Focus on what you can control: coping with radical uncertainty
You can also watch JEH’s video on the CARES Act and your business here.
Two key diagrams:
From the Balance: the business cycle, illustrated
From the Federal Reserve Bank of San Francisco: visualizing the difference between a recession and a depression
- Are we heading for a depression or a recession, and what’s the difference?
- A team of economists from the Boston Consulting Group’s Henderson Institute outlines why they think the US economy is not heading for a new Great Depression.
- This is the article I referenced near the end of the episode (-LP): What everyone’s getting wrong about toilet paper shortages
- Last but not least, consider this a teaser for part 2 of this podcast: