First a pandemic, then a bear market, and then the highest inflation in four decades … and now the word on everyone’s mind is “recession.” As in: “Are we in one or not?” We’ve had one classic sign of an economic slowdown: two quarters of contraction in US gross domestic product. But that’s been accompanied by healthy wage growth and employment and continued consumer spending. Complicating the picture still further, measures of consumer confidence are way down as people face rising prices for everything from gas to housing.
Financial writer and social media influencer Kyla Scanlon has called this a “vibecession,” a period in which “the economic data says things are okay, but people aren’t.” In this topsy-turvy environment, what appears to be good economic news could turn out to be bad. Signs of strong growth will influence how much the Federal Reserve decides it has to raise interest rates, leading to higher costs on credit cards, mortgages, and car loans—and tougher business conditions that could lead to job cuts.