Rather than a recession, we could be in a ‘richcession’ instead

on Aug16
by | Comments Off on Rather than a recession, we could be in a ‘richcession’ instead |

Fed Chair Powell: Fed staff are no longer forecasting recession

A ‘richcession’ may be underway

“In most recessions, unemployment rises more for lower-income groups,” said Tomas Philipson, a professor of public policy studies at the University of Chicago and former 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 groups are outpacing higher-income groups.”

Maskot | Digitalvision | Getty Images

What a ‘richcession’ means for consumers

Several reports show financial well-being is deteriorating. Rather than a “richcession,” this more closely resembles a so-called K-shaped recovery, said Greg McBride, Bankrate.com’s chief financial analyst.

Wealthy 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 signs of financial strain,” he said.

However this economic period is ultimately defined, it will only be in hindsight, McBride said. “Typically, by the time a recession is declared, the recovery is underway.”

Subscribe to CNBC on YouTube.

Previous postApple begins iPhone 15 production in India, report says Next postNew Union Leaders Take a Harder Line

Los Angeles Financial times

Copyright © 2024 Los Angeles Financial times

Updates via RSS
or Email