Aside from the debate about 'formally*' entering a recession - if you do abide by the strict two quarters of real GDP decline rule, the economy still added ~2 million jobs during those same two quarters and the economy grew at a nominal ~6%. I don't think we're quite to the "economic turmoil" phase of things.
Decision makers are now starting to openly push for moves to increase unemployment to get wage "inflation" down.
I feel we're about to enter into a situation very similar to the early 90s, and we'll see a wave of pro-austerity politics and a lot of talk about "tightening our belts" -- slashing employee rights and social programs and cutting all kinds of social spending -- which is really about re-instilling labour discipline.
I suspect here in Canada the temporary foreign worker program is about to have the floodgates opened. Employers, especially small businesses, are really not happy about having to pay more than minimum wage, and they're very unhappy about having their authority in the workplace undermined by workers with seemingly excessive bargaining power.
The situation in the US is obviously more complicated by their messed up immigration system.
I have no idea what will happen myself, but it all feels a bit different. I think a lot of what's going on are still shocks from the pandemic, supply chains, and geopolitical stuff.
Not to mention the middle boomers are entering retirement age right now. This exact scenario of boomers leaving their jobs and creating an employment vacuum in their wake is something I've been hearing about for 30 years.
Why is it any different if the government takes out a loan to pay for work instead of someone like GE doing the same? If someone takes out a loan, and then spends the money building a plant or hiring employees, the economic activity is real..
It's the age old problem of once you choose the system of measurement, it's going to get manipulated by the people who get measured by it. GE is not going to rack up a bunch of debt for the explicit purpose of making sure the GDP number goes up. When the government creates a bunch of money just to make sure the GDP number goes up, GDP stops being as useful at telling you how things are going.
