AFAIK, the US has never had a mini-recession, which I define as a economic slump where the unemployment rate rises by between 1 and 2 percentage points. That’s kind of weird, as all of the business cycle models that I am aware of suggest that mini-recessions should be more common that larger recessions, just as small earthquakes are much more common than big earthquakes. In these models, recessions are generally caused by “shocks”. So why don’t small shocks create small recessions?
I don’t know of any economists who have answered this question. Heck, I don’t even know of any economists who have asked this question. But FWIW, Deutsche Bank is forecasting that America will experience its first mini-recession next year:
The U.S. will tumble into a recession next year as the Federal Reserve jacks up interest rates to combat high and widening inflation, Deutsche Bank economists David Folkerts-Landau and Peter Hooper said in a report on Tuesday. . . .
Under the forecast, U.S unemployment rises sharply to 4.9% in 2024. Joblessness in March clocked in at 3.6%.
I have a policy of not forecasting things that cannot be accurately predicted. One of those things is asset prices. Another is business cycles. Instead I describe factors that influence asset prices, or that make the economy more unstable. As an analogy, I did not predict Russia would invade Ukraine this year; I suggested that Putin’s Russia was a greater threat to world peace than Xi Jinping’s China, at a time when most of our so-called “experts” were suggesting the opposite.
I will say that this post from last July is looking somewhat better today.