As fears of a recession fade, we may instead be going through a "richcession." Here's what that means for you

Even though people have been saying for a long time that a recession is coming, the U.S. economy has done reasonably well.

Two of the three quarters in the first half of 2023 showed growth, and a strong job market and steady consumer spending are good signs for the coming months.

Gross domestic product, a measure of the economy's overall health, went up more than expected in the second quarter, and several interest rate hikes by the Federal Reserve have yet to cause the economy to shrink.

After predicting a recession for more than a year, some experts have changed their minds and now favour the idea of a "soft landing" or even a "rolling recession," in which different parts of the economy shrink at other times instead of all at once.

But a "richcession" might be a better word for the present situation since most job losses so far have been among white-collar workers.

A 'richcession' may be happening.

Challenger, Grey & Christmas, a global outplacement and business and executive coaching company, says that employers announced plans to cut 481,906 jobs in the first seven months of the year; this is 203% more than the 159,021 jobs cut at the same time last year.

Some industries, like banking and technology, have been hit harder than others. A series of layoffs on Wall Street earlier this summer added to worries that a recession is still possible because of these professional job losses.

But there still need to be more people to fill open jobs in the service business, and the unemployment rate is only 3.5%, which is close to a 50-year low.

What customers need to know about a "richcession"

"Recession is a loaded term," said Jacob Channel, a senior economist at LendingTree. "There might not be as many white-collar jobs as last year, but there are still some."

"At the end of the day, even if it looks like white-collar hiring is going down, that doesn't mean the economy is in trouble," Channel said.

"On the other hand, most recent data shows that, despite many headwinds, the economy is doing surprisingly well," he said.

But regardless of how the country's economy is doing, higher prices hurt many Americans, and most of them have used up their funds and are now relying on credit cards to get by.

Several studies show that financial health is getting worse. Greg McBride, the top financial analyst at Bankrate.com, said this isn't a "richcession" but a "K-shaped recovery."

Rich Americans aren't in trouble, but credit card debt is at an all-time high, and 61% of people live from paycheck to paycheck. He said, "Those are signs of financial stress."

McBride said that no matter how this economic time is described in the end, it will only be in reflection. "By the time a recession is called, the recovery is usually already underway."