WXMI — The United States economy declined for the second straight quarter, raising fears that the country could be headed for a recession.
According to the Associated Press, most economists do not believe the economy is in a recession, but many expect an economic downturn to begin later in 2022 or 2023.
Despite six months of a shrinking economy, the Associated Press says employers added 2.7 million jobs in the first half of the year, and the unemployment rate dropped to 3.6%, near a half-century low.
However, Americans still are feeling economic pain with inflation at its highest level in four decades, which is driving up the price of many essential goods including gas, food and rent.
FOX 17 talked with Dr. Brian Long, director of Supply Management Research at Grand Valley State University, Thursday to find out which factors could indicate a potential recession.
Dr. Long explained that there are several factors that go into determining a recession, including employment and unemployment, industrial production and inventories.
“Right now, we can say that we may be sliding toward a recession, but the other numbers that are there right now that make up a recession, they’re just not there, so I have to go along with the people that say we’re not quite to a recession yet,” added Dr. Long.
Additionally, Dr. Long told FOX 17 that both consumer confidence and business confidence are fading, which could signal a slide toward a recession.
“The other thing that I watch very closely are inventories and businesses are starting to liquidate their inventories and that is not a good sign. This has led to recessions in the past,” Dr. Long explained.
FOX 17 asked Dr. Long about the impacts a recession could have on West Michigan, to which he replied:
“For West Michigan it’s going to be pretty mild because automotive is still holding us up. The fact is, the biggest cyclical industry that we have on the west side of the state is automotive, followed by office furniture.
“Now office furniture still has the orders that they haven’t filled yet, so we’re not going to see the impacts of that for a while, but automotive, it’s going to take them a long time to go through all of the pent-up demand that there is right now.
“And so for that reason, I’m optimistic that West Michigan probably isn’t going to feel the brunt of this recession probably anywhere near as much as other parts of the country.”
