Could the Media End Up Talking Us Into a Recession?

It's a possibility, believe it or not.

Will a recession hit in 2023? Many financial experts seem to think so.

In fact, for much of the second half of 2022, there were countless news reports featuring quotes from prominent economists and financial bigwigs warning Americans to boost their savings account balances and gear up for an extended period of economic decline.

Interestingly enough, though, the media hasn't been as quick to share positive economic news. For example, the national unemployment rate is at practically its lowest level in 20 years. But has that fact been all over the news? Not so much. Instead, alarmist headlines like "Economic Doomsday Looms" seem to have taken over.

And that's problematic for a few reasons. First, scary recession headlines can cause people a lot of needless fear and worry. But more so than that, if the media keeps playing up recession warnings, it could be enough to actually fuel an economic downturn.

A self-fulfilling prophecy nobody wants

Current economic conditions point to a pretty strong economy, not a weak one. Not only is unemployment low, but consumer spending levels held steady during the latter part of 2022, particularly during the holiday season.

You'd think that would be enough to give consumers a fair amount of reassurance. But it's hard to have confidence in the economy when you keep reading about the potential for a painful recession within the next 12 to 24 months.

Meanwhile, all of those recession warnings might lead consumers to change their behavior. For some, that might mean boosting their savings and paying off high-interest credit card debt, both of which are great things to do.

But what might also happen is that consumers start curbing their spending substantially in the coming months because they're scared that a recession is right around the corner. And a sudden, notable decline in consumer spending is the very thing that's likely to land us in a recession in the first place.

See the problem?

It's a good thing for financial experts to caution Americans about a potential economic decline. But if the media focuses solely on the bad and not at all on the good, we could end up experiencing an economic downturn that might otherwise be avoidable.

Don't assume a recession is a given

Based on some of the warnings you'll see out there, you might think a 2023 or 2024 recession is a given. That's not necessarily the case.

Also, even if the economy slows down a bit in the next 12 to 24 months, that doesn't mean we'll enter recession territory. As such, it's best to take those recession warnings with a grain of salt and a pinch of optimism.

Shoring up savings and shedding debt are great things to do no matter what. But consumers should realize that a recession isn't a foregone conclusion. And consumers also shouldn't alter their habits to an extreme degree. If they buy into the fear and go that route, it could fuel a recession that unleashes a world of misery for a lot of people.