Question

Use the information below to answer the question: "Is a recession in front of us and who is most likely to lose their jobs in the next recession?" In your answer, cite two data series or points (i.e. current unemployment rate, job growth, GDP growth, etc.) and answer which group's unemployment increases the most during a recession.

INFO BELLOW is the graph of current unemployment, job growth, GPP growth, etc.

Answer 1

The world economy, has rapidly begun to shrink in 2019. Some of the prime reasons for this slowdown are said to be the Trade war between the United States and China and economic crisis in key developing regions such as India which have had a huge pressure on the economies of these countries and the world overall.

The last known Great Recession happened in the year 2008 in which the housing and banking crisis in the United States send ripples across the World. A recession is best defined as a decrease in the spending of all households which leads to a collapse in the employment rates as lesser demand comes from the market place and other inflicts havoc across most economies. During a recession, both suppliers and consumers are heavily effected and countries have tried their best to reduce the effects on the economy. No country wants a recession in their economy as it largely effects the interests of all groups.

Now we look at two of the most critical data points which effect unemployment and help in deciding if a recession is round the corner. This is Job Growth and GDP of the United States.

Job growth indicates the addition of new jobs in an economy. It suggests that how many new areas are opening up in a country when compared with the education status.

In the United States, job growth averaged to about 1, 80,000 Jobs a month. In the year 2018 this was at around 2.30.000 new job creations a month. A steady decline of 50,000 average jobs per month is thus indicated year on year in performance.

Further, looking at the GDP growth rate, it is falling by 1 % and is currently at 2% when compared to 3% in 2018. This indicates a negative outlook for the country.

These statistics are indicated for USA as they serve as a benchmark in judging the conditions of most other economies also. The United States and its economy have a deep impact on other countries which must be kept in mind while looking at these figures.

In my opinion, a global recession may soon strike as across all countries, the economic indicators such as growth rate, job growth etc. are heavily impacted. Countries such as India which had growth rates of 8-10% have now shrunk to 4% and even lesser.

Most effected groups:-

During a recession, the most effected groups are those which are engaged in primary production of goods and in the service sector they are those which provide typical product support or ancillary help to the primary process owners.

Recession has a direct hit on the consumption of goods and people prefer buying in lesser quantity and go towards cheaper alternatives. As a result, the manufacturing sector and agriculture in most countries is the most vulnerable group which gets heavily impacted by any change in the recession.

In the services sector, those employed in supporting industries are heavily impacted as their requirements get reduced and companies look towards cutting their costs to maintain profitability as a result these people find themselves soon running out of jobs.

Please feel free to ask your doubts in the comments section if any.