‘A very traditional recession’: Local economist weighs in on slowdown concerns

SEATTLE - Many economic experts agree the country’s economy continues to do well, but at some point, it will start to slow.

The question many economists are debating is when it will happen.

Right now though, the economy continues to prosper. People are currently hitting the stores or online, and spending for the holidays.

But with the announcement on Monday of General Motors laying off more than 14,000 workers and Starbucks announcing more than 300 layoffs a few weeks ago, are these initial signs of a recession?

"Recessions happen. This country’s had 47 of them in it’s history, and it will have 47 more,” said Matthew Gardner, chief economist for Windemere Real Estate.

It wasn’t long ago when Gardner first talked about the dreaded "r" word.

“About a year ago, I suggested we’d be entering a business-cycle recession in late 2019, early 2020. I’m certainly staying by that theory,” he said.

But for many, the Great Recession of 2007-2008 remains fresh in people’s minds, he said. Will the next one come to that?

“I think it will look more like a very traditional recession, very similar to the one we saw in 1991,” he said.

Which Gardner said was two quarters of negative growth, an unemployment rate that didn't get above 6%, and housing prices that stabilized, but didn't drop like 2007. Gardner also believes the recession won’t be like the dot.com bust that hit Seattle hard.

“We’re not going to stick out that much, but will we see a slowing down in construction activity, absolutely.  We will see both on the residential and the commercial sides,” said Gardner.

The other thing economists are examining is what will drive the recession and how deep will it go.

“I think it could be one of several things, corporate debt is one. Interest rate increasing a bit too quickly is another possibility, and trade wars and the potential for that, I think that could be certainly something,” he said.