Recent polling shows that nearly three in four Americans are taking steps to prepare for a recession as the US records its second straight quarter of GDP losses.
74 percent of those surveyed are preparing for a recession, 47 percent of whom are cutting discretionary spending, 35 percent saving more for emergencies, and 30 percent paying off credit card debt, according to the Bankrate survey.
69 percent of respondents stated that they are worried about a recession taking hold by the end of 2023 as inflation and negative GDP numbers show a worsening economy.
The survey also found that 41 percent of respondents do not feel that they would be prepared for a recession if it were to happen by the end of the year while 17 percent wouldn’t be prepared at all.
While the Democrats did pass the so-called “Inflation Reduction Act,” 51 percent of respondents say that inflation, which has peaked at 9.1 percent, will be higher next year which has been substantially driven by increased federal spending.
“While some Americans indicate they believe the economy is already in a recession, it is perhaps more important that so many are already taking actions based on their fears or beliefs that one is inevitable over the next year or so,” stated Bankrate senior economic analyst Mark Hamrick.
HISTORIC INFLATION NUMBERS SHATTER POSITIVE EXPECTATIONS FROM DEMS FOR MONTH OF JULY AS BIDEN’S ECONOMY CONTINUES TO TANK
While many Americans are preparing for a recession, the economics show that the US is already in one. In the first quarter, US GDP experienced a -1.6% growth as a wider trade deficit developed due to increased consumer spending and an increase in imports as Americans began to spend the various savings accrued during the coronavirus pandemic. Second quarter GDP fell -0.9 percent.
While the US economy is currently in a recession as defined by economists, with two consecutive quarters of GDP losses, the White House has disagreed with that definition.
In July, the White House released a statement regarding what classifies a recession, which is traditionally determined by two consecutive quarters of GDP shrinkage.
“While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle. Instead, both official determinations of recessions and economists’ assessment of economic activity are based on a holistic look at the data—including the labor market, consumer and business spending, industrial production, and incomes,” the statement read, adding, “Based on these data, it is unlikely that the decline in GDP in the first quarter of this year—even if followed by another GDP decline in the second quarter—indicates a recession.”
While the Biden administration may argue that the economy is not in a recession, Americans disagree as they prepare for an increasingly inflated, low-growth economy under President Biden.
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