The Correction... Not the Recession
Over the last year, everyone has been talking about recession, recession, and more recession. In the middle of this overwhelming chatter, those looking at the real data see that the U.S. economy is actually in a CORRECTION, not a recession. Let me explain.
When you look at the graph in this post, you can see how the economy was humming along in 2018 and 2019.
So many economic metrics were flourishing at the end of 2019. Then, BANG! The pandemic created total havoc in the economy, dropping it into the abyss. Every industry practically came to a screeching halt, unless you were an essential business. It was a record drop in the GDP and unemployment. During the pandemic, the government dumped $2 trillion in funding to individuals and businesses. It was a force of economic impact like we have never seen.
Here is where it gets good. Look at the growth in GDP coming out of 2020. It is straight up. The economic numbers show that U.S. consumers bought as many goods and services in 17 months as they had in the previous 7 years. Let me say that again...U.S. consumers spent as much in 17 months on goods and services as they did in the previous 7 years!
What supply chain could withstand that onslaught of demand? Virtually none. That is why supplies chains are so challenged. They had the artificial spike in spending from $2 trillion being pushed into the economy, and they didn't have the staffing levels or enough raw goods to make their product or deliver their service fast enough.
Think of your association. How would you deal with receiving 7 years worth of new members all within a 17 month span? Sounds awesome, but it would most likely overwhelm your entire staff. You can't work or hire that fast.
And what do you think happens when the economy grows that fast? It is going to make a u-turn, and return back to normal. Hence a recession, as defined by the government as two consecutive quarters of declining growth. With that much growth, of course it will take two quarters to bring us back from the heavens of an economic high. And where did we land? Back with the consistent growth had COVID never happened. Hence THE GREAT CORRECTION.
You see, most every company fell prey to thinking the artificial spike in GDP and spending was the new norm. Far from it. When the $2 trillion ran out and people went back to work, the economy is now returning back to reality. The big layoffs that we're currently seeing are coming from companies who over-hired due to the spike after the artificial spending of $2 trillion. They too are trying to get back to normal.
This isn't bad news. This is good news. The CORRECTION put the economy back on track. As I shared in my previous post 3 weeks ago (CLICK HERE), the largest generation in history is now in their mid 30's. People make most of their earnings between 35 - 55 years of age. The wave of growth is coming for many industries. Just like the Baby Boomers drove growth the 80's and 90's, the Millennials will drive growth the 20's and 30's.
Are your members prepared for the wave of growth over the next 7 years? I hope so. If you would like your members and attendees to be energized with clarity and hope about the next 7 years, feel free to connect with Tom Morrison about a keynote for one of your 2023 meetings. When your members learn what they didn't know about the future, it is mind blowing and brings them back for more.
CLICK HERE if you would like to consider hiring Tom for one of your 2023 meetings.