Are we in a recession? Local economist explains the economic warning signs

DAYTON — Not everyone pays attention to the stock market every day. But people pay attention to economic words like slowdown and recession.

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Thursday’s report from Commerce Department revealed the United States’ gross domestic product contracted for the second quarter in a row, a key signal to many economists that the U.S. is now in a recession.

While the technical definition of a recession is two straight quarters of shrinking GDP numbers, the GDP is only part of the equation, Fall Ainina, area economist and director of research at the James Investment Group. For economic slowdowns to become a recession, the the independent National Board of Economic Researchers considers other factors like real income, employment, and industrial production.

“What we are in is slowing down of the economy,” Ainina told News Center 7′s Mike Campbell.

“Usually you don’t have a recession when you have a tight labor market.”

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Ainina said 3.6 unemployment rate is a 50-year low and exports rose 18 percent last quarter. But there are reasons people point to fear of recession, even with these numbers.

“The housing market is down, that’s also a driver of GDP,” he said.

Chris Whiting of Dayton told News Center 7 he tries to not worry about the impacts of a recession because it’s something he can’t control.

“I am kind of in-between, I’ve got a good enough job. Can weather it pretty well but it is of interest to me, no one likes paying more for the same thing than you did yesterday,” Whiting said.

Inflation and recession are also on the minds of the Dayton Area Chamber of Commerce and the businesses and workers they represent.

“National economic leaders need to make sure we have a soft landing from the high inflation and we don’t get thrown into a multi-year recession. Dayton businesses have been doing well, but if interest rates get too high, business could stop borrowing,” Chris Kershner, CEO of the Dayton Area Chamber of Commerce said in a statement to News Center 7.

Consumer spending makes up 70 percent of the GDP and the reaction by consumers will likely determine the next steps.

“If everybody says were in a recession, we are going to end up in a recession because of behavior,” Ainina said.

Ainina and other economists said the Federal Reserve and other national leaders are trying to walk a tight line between cooling the economy and slowing down inflation, but not pushing the economy into a full-fledged recession.

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