Recession Coming?

Can the nation stem the tide of inflation and prevent a recession?

PRAY FIRST for our nation’s leaders as they set economic policies in the face of a recession and economic uncertainty.

I know how to be brought low, and I know how to abound. In any and every circumstance, I have learned the secret of facing plenty and hunger, abundance and need. I can do all things through him who strengthens me. – Philippians 4:12-13

Is a recession coming?

“Americans have been through some very tough times,” Treasury Secretary Janet Yellen said recently. “A pandemic that resulted in huge job loss and disruptions in people’s lives, that was very traumatic. And we had a period of high inflation, largely now it seems due to disruptions associated with the pandemic itself, supply chain issues and other things. And although inflation has come down, at least over the last six months has been running at very normal levels that are the kind of levels the Fed is shooting for.”

Inflation can cause a recession if consumers cut back on spending, and if interest rates established by the Federal Reserve cause people to stop making major purchases, like housing. When wages don’t keep pace with inflation, a recession could be the next outcome.

When evaluating whether or not the nation is facing a recession, the key indicators are a decline in real income, a rise in unemployment, lowered or slowed retail sales and industrial production, and a lack of consumer spending. When consumers lose confidence in the economy or worry about their own family budgets, the entire economy can slow drastically.

In last week’s meeting, the Federal Reserve said it was keeping interest rates at current levels, and they cited a 6.8 percent jump in consumer confidence, bringing it to its highest level since December 2021. The goal is the see if these rates can keep inflation in check.

Unemployment grows.

As borrowing money becomes more costly due to high-interest rates, many corporations respond to high inflation with cutbacks. This means that a key metric for identifying if inflation will result in a recession, is unemployment. In January 2024, Microsoft laid off 1,900 employees, and Google similarly released several hundred. Pixar, Amazon, Twitch, BlackRock, Universal Music Group, TIME magazine, Sports Illustrated, the Los Angeles Times, Citigroup, Macy’s, Wayfair, Levi Strauss, NBC News, UPS, and even TikTok have also had layoffs since the beginning of the year.

While some jobs are offsetting inflation with higher pay, it may not be enough, even for those still employed. A report from the ADP payroll service company said that, “Wages adjusted for inflation have improved over the past six months,” but S&P Global predicted that growth “will fall short of its potential,” that the dollar will depreciate.

As unemployment grows, even if inflation is curbed, those out of work lack spending power. This exacerbates the issue. A return to strength of the job market could be the key to avoiding an all-out recession.

Americans are hurting.

The latest Insight/TIPP poll released on January 31 shows that 64 percent of Americans are “living paycheck to paycheck these days.” Roughly a quarter of those polled have zero in their savings accounts, and another 20 percent said they have only $1,000 set aside.

Their analysis said, “More than half of those in the wealthiest income bracket — those earning $75,000 or more a year (53%) — and those who are investors (51%), another relatively wealthy group, each said they’re also having trouble making ends meet on a monthly basis.”

Economist Claudia Sahm said she thinks that whether the U.S. will have a “soft landing” or not economically should be known by mid-year. “Definitely by this time next year, we’re either landed, or we’re in a recession,” she said.

Most economists, however, are struggling to make solid predictions. Especially with the 2024 elections approaching and the fact that global markets are highly sensitive to political changes, especially in the cases of administration changes or depending on which party holds a majority in Congress.


— Pray for believers in America facing uncertainties in today’s economy to depend on the Lord’s guidance. Seek his will in all you do, and he will show you which path to take (Proverbs 3:6 NLT). The Lord is my shepherd, I shall not want (Psalm 23:1).
— Pray for wisdom in the management of your money. If any of you lacks wisdom, let him ask God, who gives generously to all without reproach, and it will be given him (James 1:5).


  • Pray for those who guide the nation’s monetary policies to be prudent.
  • Pray for American’s who feel the greatest impact from inflation and cost of living hikes.
  • Pray for Congress and the administration as they grapple with government spending and it’s impact on economic growth.

Sources: Department of Labor, Axios, NBC News, Fox Business, SP Global, AP News, US Bankd,, Washington Examiner, Vox


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