{"id":16788,"date":"2023-03-27T07:49:10","date_gmt":"2023-03-27T12:49:10","guid":{"rendered":"https:\/\/tilt-up.org\/tilt-uptoday\/?p=16788"},"modified":"2025-10-28T10:59:45","modified_gmt":"2025-10-28T15:59:45","slug":"why-2024-wont-be-great-recession-2-0","status":"publish","type":"post","link":"https:\/\/tilt-up.org\/tilt-uptoday\/2023\/03\/27\/why-2024-wont-be-great-recession-2-0\/","title":{"rendered":"Why 2024 won\u2019t be \u201cGreat Recession 2.0&#8243;"},"content":{"rendered":"\n\n<div class=\"wp-block-image\"><figure class=\"alignleft size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/tilt-up.org\/tilt-uptoday\/wp-content\/uploads\/2023\/03\/dreamstime_xl_12816450-b.jpg\" alt=\"\" class=\"wp-image-16789\" width=\"680\" height=\"454\" srcset=\"https:\/\/tilt-up.org\/tilt-uptoday\/wp-content\/uploads\/2023\/03\/dreamstime_xl_12816450-b.jpg 1024w, https:\/\/tilt-up.org\/tilt-uptoday\/wp-content\/uploads\/2023\/03\/dreamstime_xl_12816450-b-300x200.jpg 300w, https:\/\/tilt-up.org\/tilt-uptoday\/wp-content\/uploads\/2023\/03\/dreamstime_xl_12816450-b-768x512.jpg 768w\" sizes=\"auto, (max-width: 680px) 100vw, 680px\" \/><\/figure><\/div>\n\n\n\n<p>By ITR Economics<\/p>\n\n\n\n<p>ITR Economics recently revised its outlook for the US industrial sector. We covered the driving factors in the revision itself and the factors that will keep the upcoming recession \u201cmild\u201d\u2014or more akin to the recessions in the early-1990s and early-2000s than the Great Recession of 2008. Below, we expand on those positive factors.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>For consumers: record consumer spending, robust real income, low credit burdens<\/li><\/ul>\n\n\n\n<p>Consumer spending, as measured by the US Total Personal Consumption Expenditures and adjusted for inflation, is at record highs. At the same time, Real Personal Income (excluding transfer receipts) is hovering around record highs. We track income \u201cexcluding transfer receipts\u201d to adjust for the massive amounts of government stimulus money that was disbursed during the pandemic. The Expenditures and Income figures alone suggest that consumers are broadly on solid financial footing and will be able to weather higher interest rates and hawkish Federal Reserve policies relatively well. In addition, consumers generally have exceptional room to borrow. Household credit card debt as a percentage of median annual earnings averaged just under 13% in the third quarter of 2022 (latest available data). The pre-pandemic, five-year average was roughly 14.7%, and, leading up to the Great Recession, credit card debt rose above 20% of median annual earnings. The current low levels of credit card debt burden suggest consumers have some cushion to borrow before their finances become shaky. It is important to note, however, that lower- and fixed-income consumers are likely to be hit harder by the recession, because they have already been squeezed by inflation. Higher-income consumers and those in lower cost-of-living areas are likely to fare better, relatively, throughout this time.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>For businesses: record profits, robust backlogs, and reshoring trends<\/li><\/ul>\n\n\n\n<p>US Corporate Profits for the third quarter of 2022 (latest available data) were virtually even with the record-setting second quarter, indicating relative success at navigating elevated inflation, supply chain snags, and waning cyclical momentum both at home and abroad. During the pandemic, supply chains became so tangled that even now the Global Supply Chain Pressure Index is elevated relative to normal levels. Many businesses were unable to fill orders amid stimulus-fueled record demand, leading to elevated backlogs. Lead times remain elevated in a variety of industries. This suggests that backlogs are likely to stay relatively robust, which will ease some of the impacts of the current higher interest rates and temper industrial sector decline. Finally, onshoring and reshoring trends\u2014that are, in part, efforts to avoid future supply chain disruptions\u2014are a positive trend for US businesses.<\/p>\n\n\n\n<p>Given the consumer and business strengths laid out above, we expect the 2024 recession to be relatively mild compared to historical cycles; the expected decline in annual US Industrial Production, peak to trough, will come in at 2%\u20133%. However, there is risk that the Federal Reserve Board will keep interest rates elevated longer than anticipated, given the body\u2019s recent hawkish rhetoric. If the yield curve remains inverted beyond 2023, it would indicate a risk to the anticipated timing and amplitude of the upcoming recession in the industrial sector. We will be watching the above factors closely to determine if new risks are developing. For example, while backlogs are elevated, order cancellations are more likely on the back side of the business cycle.<\/p>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:50%\">\n<div class=\"wp-block-columns are-vertically-aligned-center is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:100%\">\n<pre class=\"wp-block-verse\"><span class=\"has-inline-color has-vivid-cyan-blue-color\">Connor Lokar, senior forecaster with ITR Economics, is set to address attendees at the 2023 Tilt-Up Convention and Expo in Tampa, Florida, on September 21, 2023. Few economists present their insights with the authority, accuracy, and humor that Connor Lokar brings to the stage. As a millennial, Connor brings a new perspective to the world of economics, delivering ITR\u2019s industry-leading accuracy to current C-suite executives while forging connections with the next generation of business leaders. Connor specializes in construction, but consults and presents to businesses across all industries, helping them grow revenue and remain profitable through an ever-changing business cycle.<\/span><\/pre>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:50%\">\n<figure class=\"wp-block-image size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/tilt-up.org\/tilt-uptoday\/wp-content\/uploads\/2023\/03\/Connor-819x1024.jpg\" alt=\"\" class=\"wp-image-16791\" width=\"205\" height=\"256\" srcset=\"https:\/\/tilt-up.org\/tilt-uptoday\/wp-content\/uploads\/2023\/03\/Connor-819x1024.jpg 819w, https:\/\/tilt-up.org\/tilt-uptoday\/wp-content\/uploads\/2023\/03\/Connor-240x300.jpg 240w, https:\/\/tilt-up.org\/tilt-uptoday\/wp-content\/uploads\/2023\/03\/Connor-768x960.jpg 768w, https:\/\/tilt-up.org\/tilt-uptoday\/wp-content\/uploads\/2023\/03\/Connor-1229x1536.jpg 1229w, https:\/\/tilt-up.org\/tilt-uptoday\/wp-content\/uploads\/2023\/03\/Connor-1638x2048.jpg 1638w, https:\/\/tilt-up.org\/tilt-uptoday\/wp-content\/uploads\/2023\/03\/Connor-scaled.jpg 2048w\" sizes=\"auto, (max-width: 205px) 100vw, 205px\" \/><\/figure>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<div class=\"mh-excerpt\">By ITR Economics ITR Economics recently revised its outlook for the US industrial sector. We covered the driving factors in the revision itself and the factors that will keep the upcoming recession \u201cmild\u201d\u2014or more akin <a class=\"mh-excerpt-more\" href=\"https:\/\/tilt-up.org\/tilt-uptoday\/2023\/03\/27\/why-2024-wont-be-great-recession-2-0\/\" title=\"Why 2024 won\u2019t be \u201cGreat Recession 2.0&#8243;\"> Read more&#8230;<\/a><\/div>\n","protected":false},"author":6,"featured_media":16789,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,29],"tags":[],"class_list":{"0":"post-16788","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-industry","8":"category-news"},"_links":{"self":[{"href":"https:\/\/tilt-up.org\/tilt-uptoday\/wp-json\/wp\/v2\/posts\/16788","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tilt-up.org\/tilt-uptoday\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tilt-up.org\/tilt-uptoday\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tilt-up.org\/tilt-uptoday\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/tilt-up.org\/tilt-uptoday\/wp-json\/wp\/v2\/comments?post=16788"}],"version-history":[{"count":7,"href":"https:\/\/tilt-up.org\/tilt-uptoday\/wp-json\/wp\/v2\/posts\/16788\/revisions"}],"predecessor-version":[{"id":19080,"href":"https:\/\/tilt-up.org\/tilt-uptoday\/wp-json\/wp\/v2\/posts\/16788\/revisions\/19080"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tilt-up.org\/tilt-uptoday\/wp-json\/wp\/v2\/media\/16789"}],"wp:attachment":[{"href":"https:\/\/tilt-up.org\/tilt-uptoday\/wp-json\/wp\/v2\/media?parent=16788"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tilt-up.org\/tilt-uptoday\/wp-json\/wp\/v2\/categories?post=16788"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tilt-up.org\/tilt-uptoday\/wp-json\/wp\/v2\/tags?post=16788"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}