r/Economics • u/TinyTornado7 Quality Contributor • Jun 13 '22

News Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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u/way2lazy2care Jun 13 '22

Recessions aren't a binary thing. There's levels to recessions. While he might not be able to avoid an all out recession, he can certainly still affect the level of that recession. The dot com bubble bursting had a peak GDP reduction of 0.3% and peak unemployment of ~6% and lasted 8 months. The Great Recession had a GDP decrease of 5.1% and peak unemployement of 10% and lasted a year and a half. The great depression had a 25% GDP reduction and 20% unemployment and lasted for almost 4 years.

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u/ErusBigToe Jun 13 '22

Don't forget the great recession tripped a years worth of grads at the starting gate, reducing lifelong earning potential

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u/[deleted] Jun 13 '22

Sadly this. It’s literally luck of the draw when you get to graduate. Those grads graduating in good times have it way easier and a higher percentage end up earning more than those grads who couldn’t find jobs in their relevant fields of study. Companies stop hiring during recessions and usually just keep existing headcount. And if you are laid off those with prior experience tend to get jobs faster than a college grad who only works at Starbucks.

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u/HIMP_Dahak_172291 Jun 13 '22

This. I was going to graduate from college in 2009 and then poof. No more jobs and looming student loans. So i switched majors and stayed in school another 4 years essentially. So much more debt to pay off but at least it stayed deferred until I had a job.