Defining a Recession Based on Employment Trends

A recession is not just defined by technical factors like GDP decline but is characterized by a significant rise in unemployment. In the past, the oversupply of labor, particularly with the coexistence of two large working generations, the baby boomers, and millennials, contributed to high unemployment rates. However, as the baby boomers retire and are replaced by the smaller gen Z workforce, the labor market is tightening, requiring fewer new job creations to maintain pace with labor force growth. This shift serves as a significant factor in preventing a surge in unemployment rates.