While the U.S. government has yet to formally label the U.S. economic downturn, 41% of respondents to a recent survey said they feel the country is already in a recession. A Conference Board report, published on Aug. 18, analyzed the responses of more than 1,000 people — mostly knowledge workers — regarding recession observations.
Another 33% of respondents said they believe the economy will be in a recession within the next six months.
Workers’ perception may seem hasty, but not inaccurate: on Aug. 22, the National Association of Business Economics reported that 72% of economists surveyed believe the U.S. will be firmly in a recession by the middle of 2023.
One in five economists surveyed told the association they believe the U.S. is already in a recession, specifically by the National Bureau of Economic Research’s standards. The NBER determines a recession as a “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.” Conversationally, the period of time is said to be two financial quarters.
Most workers’ perception that the U.S. is already in or heading toward a recession may be informed by a very public shift in HR managers’ behaviors. In TCB’s survey, 36% reported witnessing hiring restrictions, 22% said they had witnessed a hiring freeze, 19% have seen organizational restructuring, about 15% had seen deferred or eliminated bonuses and 13% had witnessed layoffs.
Notably, respondents told TCB the cost-cutting measures they have seen at their organization are “not yet as severe” as the early employer responses to the COVID-19 pandemic.
Rebecca Ray, TCB’s executive vice president of human capital, said “this recession will be significantly different from prior downturns,” according to a press release.
"Businesses should be mindful of the lessons learned from the COVID recession, when those that furloughed or laid off workers saw just how hard it can be to get that talent back,” Ray continued. “As we face another recession — which The Conference Board projects will begin later this year — leaders should explore alternatives to layoffs and furloughs, such as offering incentives for voluntary separation."
