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It’s been a significantly long time since the United States last went through a recession — longer than the average gap between economic slowdowns, if you don’t count the pandemic recession of 2020, which lasted only two months but saw GDP decline by about 20%.

If you don’t count the brief pandemic recession, it has now been an incredible 16 years since our economy has faced a prolonged slowdown! That is longer than any gap between recessions in the last 100 years. In fact, the previous longest gap between economic declines occurred in the 1990s, a period of 10 years of economic growth brought to an end by the bursting of the dot-com bubble and marked by the September 11 attacks.

The textbook definition of recession is a decline in gross domestic product (our national output) for two consecutive quarters. Most recessions aren’t officially labeled as such by the National Bureau of Economic Research until we are well into the decline. In fact, some recessions haven’t been declared until the economy was back on the upswing!

Before the COVID-19 recession, our last major economic decline took place from December 2007 though June 2009 — a downturn that lasted 18 months, amid financial failures and mortgage foreclosures. It was belatedly labeled the Great Recession, perhaps to draw parallels to the Great Depression, which took place nearly 100 years ago.

The pandemic recession briefly saw unemployment jump to 14.7% in April 2020. The Great Recession of 2007-2009 saw unemployment peak at 10% in October 2009. Job loss is one of the key features of a recession, bringing emotional as well as financial devastation to the individuals and families who were impacted.

Today’s younger workers likely don’t have any sense of the impact of a recession. That especially includes “knowledge workers” whose ability to deal with technology made them seemingly invulnerable to an economic decline — until the threat of artificial intelligence came along.

Also among those who heretofore had little to fear from recessions and unemployment are millions of government workers, many doing critical jobs to protect our country, our economy and our personal safety. They, too, were basically insulated from the threat of layoffs since government rarely contracted in size as the private economy does from time to time.

So the current layoffs of federal workers across the county has added to consumers’ concerns about the future.

Since the consumer sector accounts for roughly 70% of the economy, consumer sentiment is watched closely by economists. The latest two reports from the Conference Board and the University of Michigan have shown a sharp decline in consumer confidence. In fact, the future expectations component of the Conference Board survey has now dropped below 80 — a level at which recessions typically occur.

What are consumers worried about? Even before the latest federal layoffs, consumers reported fears that jobs were more difficult to find. Consumers remain worried about inflation. Egg prices make headlines because of diminished flocks hit by bird flu. But consumers don’t discriminate when they see rising prices. They panic — and hit the pause button.

Add to that the reality that promised tariffs, and retaliation, will increase prices of everything from cars to durable goods, as well as imported foods and other products.

When consumers worry about their jobs, they stop buying all but the necessities. Vacation plans are put on hold. Retail sales suffer. Home remodeling plans are put off. And even as interest rates drop a bit during a slowdown, theoretically making mortgages more attractive, a spreading fear of job loss inhibits home purchases.

And that, in case you’ve never lived through a recession — or have forgotten what the last one was like — is what happens during a prolonged economic slowdown. A recession.

One good thing about being older and retired is that you’re no longer worried about your job. Your income comes from Social Security and your retirement investment savings. But if a bear market follows the business slowdown called a recession — which often happens — you’ll want to become more conservative in your holdings.

No matter what your age, you don’t want to enter into a recession carrying a lot of consumer debt. Jobs are still fairly plentiful, giving you a chance at weekend and evening extra income to pay down that debt. If you’re still working, your retirement plan contributions should continue during any market decline, so you’re ready to profit from the next upturn.

This is not a prediction of an imminent recession, nor an attempt to spread gloomy thoughts. It’s a reality check. Another recession will come along, that’s for sure. And history says we’re stretching our luck here under current circumstances. That’s the Savage Truth.

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(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)

©2025 Terry Savage. Distributed by Tribune Content Agency, LLC.