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WASHINGTON – The country isn’t officially in a recession yet, despite two consecutive quarters of national contraction of the gross domestic product, a commonly cited indicator of an economic downturn, says Lawrence Yun, chief economist for the National Association of Realtors® (NAR). And even if the nation is facing an official recession, several healthy economic trends – including a robust job market, coupled with new efforts to boost affordable housing – could stave off a more serious slump.

New guidance from the Treasury enables state and local governments to use leftover emergency funding from the American Rescue Plan to create affordable housing. Yun says that should help ease the inventory crisis and counteract the effects of a tightening economy.

Still, there are questions about U.S. “stagflation,” a period of high inflation combined with an economic slowdown. But the National Bureau of Economic Research – the council that watches over U.S. business cycles – still hasn’t declared an official recession, Yun notes.

Major factors counteracting current slowdown conditions

• Job creation is robust. Total payroll jobs were over 150 million in early 2020 before the onset of the pandemic, Yun said at NAR’s Real Estate Forecast Summit last week. While COVID-19 shutdowns precipitated a steep decline in jobs, each month showed strong job creation after the restrictions were lifted. Though there is variation across the country, Yun says, the job market has largely recovered.“We are essentially at the same level of jobs and W-2 employment now compared to pre-COVID days,” he said. Data from the Bureau of Labor Statistics shows that right now, there are more job openings than unemployed people. As of June, there were 5.9 million workers searching for jobs and over 10 million job openings. So, while high unemployment typically characterizes a recession, “the ratio [today] is almost two to one,” Yun said.“It’s a very unusual recession – if we are in one.”