“Recession Fatigue” As Consumers Begin To Break

“Recession Fatigue” is setting in as consumers struggle under rising interest rates, high inflation, and a declining stock market. Such was a point made in a recent CNBC article:

“As the Federal Reserve aggressively raises rates to combat persistent inflation, the tough stance could come at a price. Already, falling stock markets have wiped out more than $9 trillion in wealth from U.S. households.

Fed Chairman Jerome Powell also warned the central bank’s upcoming moves to fight soaring prices may cause “some pain” ahead.

And yet, 31% of Americans said they are not equipped for an economic downturn and are not actively doing anything to better prepare for one, according to a recent Bankrate.com report.”

Interestingly, while individuals continue to suffer from “Recession Fatigue,” the economy is technically not in a recession. At least not yet, as the National Bureau of Economic Research (NBER), the official arbiter of recession dating, has not made that assessment. With unemployment rates at record lows, jobless claims at historically low levels, and consumer spending still above trend, an official recession likely has not yet begun.

However, don’t ask the average American that question. According to that Bankrate.com report, the average American has an entirely different view.

“Recession depression, recession fatigue, whatever you want to call it, the hits to Americans’ financial security keep coming. First, it was the devastating coronavirus pandemic, followed by 40-year-high inflation, and now the growing risk of another downturn. Sustaining motivation for two-plus years to prepare for tough economic times can no doubt feel exhausting.” – Bankrate.com analyst Sarah Foster.