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While a Recession Is No Longer Forecast, a 'Richcession' May Be Emerging

S.j. Steinhardt
Published Date:
Aug 16, 2023


The staff of the Federal Reserve Board no longer forecasts a recession, but some economists call the current economic environment a “richcession,” CNBC reported.

Citing continuing economic growth, a strong labor market and robust consumer spending, those who predicted a slowdown or a rolling recession are now using “richcession” to describe the current phenomenon of layoffs predominantly affecting white-collar jobs, while the overall unemployment rate is near a half-century low of 3.5 percent.

“In most recessions, unemployment rises more for lower-income groups,” 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, told CNBC. “Although we are not in an overall recession yet, the demand for and wages of lower-income groups are outpacing higher-income groups.”

Financial services and tech have experienced the worst of the downsizing so far, but a recession did not materialize.

“Recession is a loaded term,” Jacob Channel, senior economist at LendingTree, told CNBC. “White-collar jobs might not be as plentiful as they were last year, but they’re still around, … [and] even if white-collar hiring does appear to be on the decline, that doesn’t mean that the entire economy as a whole is struggling.”

But not all is rosy for many Americans who are being hurt by inflation, burdened by credit card debt, or living paycheck to paycheck. “Those are signs of financial strain,” Greg McBride,’s chief financial analyst, told CNBC.

Whether the economy will experience some kind of contraction will not be determined until later, he said. “Typically, by the time a recession is declared, the recovery is underway.”

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