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What Is a Recession Indicator? One Reason To Worry and One Argument For Optimism

There may be an inherent bias toward being on the safe side when making economic forecasts.

A recent development at some Big Tech companies could be an indicator of a recession looming on the horizon. But another factor in the job market is a reason for hope.

Posted to TikTok by Bloomberg News reporter Madison Mills under the handle @madymills, the video below briefly explains what makes her nervous about the possibility for a recession and also what gives her peace of mind. Watch the clip to find out what these are, and guess which task she's effortlessly performing while talking finance.

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In addition, Mills seems to believe there may be an inherent bias toward being on the safe side when it comes to making economic forecasts.

"Nobody wants to miss a good prediction. They don't want to say the economy is going to be totally fine and then a recession hits and they look like they didn't know what they were talking about."

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According to Mills, current hiring freezes and layoffs at Big Tech companies are a reason for recession fears. "This is the single biggest statistic that made me think a recession is possible," she says.

On the other hand, recessions are generally associated with high unemployment. As Mills explains, "Outside of the tech sector, we're still seeing job growth."

She then points to some economic statistics that support this claim. For example, payrolls rose 390,000 in May, and the unemployment rate held at 3.6%. Also, average earnings increased 0.3% for a second month.

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