Opinion | Yes, we are having a recession

There are clear signs that the U.S. is going through a recession.

Chris Klepach, Opinions Columnist


Have you bought an RV recently?

One national trend points us to a recession: RV sales. Economists use RV sales to understand economic activity because it shows the rate of investment by average consumers for recreational purchases. In November 2022, RV sales decreased by 50.4 percent compared to last year.

This statistic proves our current reality: We are in a recession.

Iowans are facing both inflated costs and reduced Supplemental Nutrition Assistance Program benefits, so they turn to food pantries to meet their food insecurities.

On January 3, the Des Moines Area Religious Council assisted a record 1,600 people in accessing food pantries. In addition, Gov. Kim Reynolds decreased the number of benefits since increasing the benefits in 2021 during the onset of the COVID-19 pandemic.

While the number of working Iowans increased by 48,300 compared to 2021, the unemployment rate increased to 3.1 percent in November 2022, according to the Iowa Workforce Development.

“Historical trends during the holiday season and throughout the winter months tend to show a rise in unemployment,” Beth Townsend, director of Iowa Workforce Development, said in a statement.

On Dec. 15, 2022, the federal government further increased interest rates by 0.50 percent to prevent further inflation. It was the Federal Reserve’s rate hike of the year. This can potentially drive people away from not just RV sales but home ownership, banking services, and other means of spending. At the same time, this is good news for those with a savings account because their investments will return more.

However, there is more to a recession than unemployment claims, which only apply depending on the past employment of individuals. Those without a job in the first place due to economic circumstances are not considered in that argument.

For workers living paycheck to paycheck, $11 an hour is not enough to survive. The increase in the cost of living and the noticeable lack of workers in many industries is a sign of our current economic slump. We can’t afford to ignore the fact that we are in a recession.

To survive this recession, shoppers are purchasing more store-brand essentials like food and hygiene products to cut back on grocery bills. With brand name products like Kellogg and Pepsi, you pay more for the brand name, not for the good.

Debt repayment should also be a consideration. Credit scores will need to be maintained for now and when the economy bounces back. You can even ask your credit card company to look into lowering interest rates.

It is an unfortunate truth we must face, but our economy is going through a recession. To ignore it for the sake of protecting a political allegiance shows an incomprehension with the facts. It’s time we tighten our belts and prepare for further downturns in the economy.

The dollar isn’t as strong as it used to be.


Columns reflect the opinions of the authors and are not necessarily those of the Editorial Board, The Daily Iowan, or other organizations in which the author may be involved.


 

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