Is the U.S. in recession? No, but most Americans seem to think so, recent research shows.
Despite the latest data showing the country’s economy is going strong, a new survey from Talker Research and Affirm found 3 in 5 Americans believe we’re in recession. On average, the respondents have held this belief since March of 2023 and feel like they’ll continue holding it until July of 2025.
A recession is characterized by an economic slowdown and can be caused by various factors, including supply and demand shifts, job loss, decreases in spending and stock market declines. It’s also thought to be directly linked to inflation because the government typically attempts to tame inflation by reducing economic activity. A recession only occurs after inflation if that slowdown intensifies.
Recent numbers from the Department of Labor do show the unemployment rate is rising, but so are wages and job growth. As for inflation, the U.S. Consumer Price Index, which is the government’s top measure for inflation, decreased 0.1% in June compared to the month prior. However, the overall rate is still above 3%, which is nearly a full percentage point above where economists would like it to be.
That could be why 68% of Americans who responded to the Affirm survey said inflation and the rising cost of living were the top reasons why they believed the U.S. is in a recession. Plus, 7 in 10 said the current inflation rate is hurting their financial plans for the future.
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Other factors driving respondents’ economic beliefs were the financial complaints 50% said they have been hearing from friends and family, 36% who have noticed loved ones reducing their spending and 20% who said they’re unable to pay off credit card debt.
Data from the National Bureau of Economic Research shows the average recession since World War II ended has only lasted 10 months. But the country has seen recessions that last anywhere from two months, like in 2020, or 18 months, like in 2007. This data would put the respondents’ theory about this “recession” being 15 to 29 months long at the top of the scale.
To calm public fears, an executive with Affirm said people need to be able to manage their finances with “greater choice and transparency.” One choice 89% of respondents said helped manage finances was a monthly budget, and a point of transparency was knowing the full price of an item, taxes and fees included, before a purchase.
