{"id":33794,"date":"2022-06-02T17:09:07","date_gmt":"2022-06-02T17:09:07","guid":{"rendered":"https:\/\/harchi90.com\/tech-retail-stock-market-crash-will-not-cause-us-economy-meltdown\/"},"modified":"2022-06-02T17:09:07","modified_gmt":"2022-06-02T17:09:07","slug":"tech-retail-stock-market-crash-will-not-cause-us-economy-meltdown","status":"publish","type":"post","link":"https:\/\/harchi90.com\/tech-retail-stock-market-crash-will-not-cause-us-economy-meltdown\/","title":{"rendered":"Tech, Retail, Stock Market Crash Will Not Cause US Economy Meltdown"},"content":{"rendered":"
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Everywhere you look, it seems like there’s a new headline warning of a <\/p>\n


\n recession
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\n <\/span>. The stock prices of major retailers like Target, Walmart, and Lowe’s have declined substantially after earnings stumbles. Layoff announcements, hiring freezes, and slowdowns at big tech companies like Facebook, Snap, and Uber are on the rise, and the venture-capital community is souring on the outlook for once high-flying growth companies. <\/p>\n

But for all the doom and gloom, I don’t think we’re headed for a recession. <\/p>\n

The pandemic was an economic shock that produced clear winners and losers. Now that we’ve reopened the economy, many of the winners from the early part of the shutdown and recovery are seeing their fortunes change. The losers of this latest shift – most notably tech companies and those big-box retailers – are prominent, and their problems are generating disproportionate interest. But while these industries may face a kind of localized “recession,” the US economy is still expanding, and the likelihood of contagion that would lead to a true recession remains low.<\/p>\n

Less stuff, more services<\/strong><\/h2>\n

The first reason for all the recession hullabaloo is a misguided conflation of the slowdown in spending on durable consumer goods – big-ticket items like washing machines, couches, laptops, and cars – with a broader recession. <\/p>\n

As people were stuck inside during the pandemic, spending on physical goods skyrocketed. This makes intuitive sense: People were spending a lot of time at home, so they bought stuff they could use there. But spending on goods peaked over a year ago and has declined by about 5% since March 2021. Recent reports from retailers suggest that consumers continue to spend less on goods. This also makes sense: If people aren’t at home as much, they no longer need all that home-related stuff. <\/p>\n

But this does not mean that consumers are suddenly spending a great deal less overall. They’re just shifting where<\/em> they spend.<\/p>\n