Ten ways things are really different than the last big recession | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Saturday
June 14, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
SATURDAY, JUNE 14, 2025
Ten ways things are really different than the last big recession

Bloomberg Special

Joe Weisenthal; Bloomberg
12 July, 2022, 03:40 pm
Last modified: 12 July, 2022, 03:52 pm

Related News

  • Goldman Sachs cuts US recession odds to 35% from 45% on trade truce optimism
  • Risk of global economic recession surges on US tariff shockwaves: Reuters poll
  • In case of a global recession, how might Bangladesh fare?
  • Goldman retracts recession forecast following Trump’s tariff pause
  • Goldman Sachs raises odds of US recession to 45%

Ten ways things are really different than the last big recession

Joe Weisenthal; Bloomberg
12 July, 2022, 03:40 pm
Last modified: 12 July, 2022, 03:52 pm
A customer shops in the vegetable section at an Akidai YK supermarket in Tokyo, Japan, on Monday, June 27, 2022. Photographer: Kiyoshi Ota/Bloomberg
A customer shops in the vegetable section at an Akidai YK supermarket in Tokyo, Japan, on Monday, June 27, 2022. Photographer: Kiyoshi Ota/Bloomberg

There's a lot of debate about whether the US economy is heading into a recession. But even if the National Bureau of Economic Research doesn't officially declare one, it's clear that we're in a period of major economic stress in the US, and globally especially. That being said, conditions are extremely different today compared to what they were during the Great Financial Crisis of 2008 and its aftermath.

Here are all the ways this time is different.

Inflation

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

This one is pretty obvious. Inflation is at multi-decade highs almost everywhere you look. It's not just the US and the euro area. It's also places that are famous for their lack of inflation — such as Japan and Switzerland — that are now experiencing it.

Employment

The flipside of this is the robust labour market. In the US, the unemployment rate is 3.6%. Conversely, in the wake of the Great Financial Crisis, we had unemployment at 8% even as late as January of 2013.

European stress

Going back to Europe for a moment, a decade ago the story was that the German economy was booming, while the periphery was deeply troubled. This time around, the big story is the stress being placed on German industry thanks to surging energy prices and a scramble to replace costly Russian gas. In 2012, Germany had a monster trade surplus. Now it's in deficit.

It's not about the spread

Countries on the European periphery, like Italy, continue to pay a higher price to borrow money in the bond market than Germany. But thanks in part to the ECB, things remain tame compared to last decade. The Italian-German 10-year bond spread is much narrower than it was in 2012.

Consumer strength

Consumer confidence is in terrible shape today. However, hard measures of consumer health are far better than basically any period during the last big downturn. Measures of consumer defaults started rising sharply in 2006 and 2007, leading into the financial crisis. They also stayed elevated for several years, even after the worst of it was over. Right now, we're still not seeing anything of the sort.

Housing

Of course, a big difference in the consumer picture comes from the housing. Home prices started slumping in early 2006, long before the big crash. These days we're seeing some weakness in housing, but so far the big national home price measures haven't started turning down.

Things > Money

It's implied in the name 'The Great Financial Crisis,' but 10 years ago, the world was plagued basically by a shortage of money, whether it was broke consumers or governments that couldn't meet financial obligations. These days, the stress is predominantly about a shortage of actual stuff — most prominently energy. One way to conceptualize this is that the Fed played an important role in stemming the stress last time by opening up swap lines with other countries in order to ease dollar liquidity stress. So far we see countries looking for fresh sources of gas and other commodities, rather than searching for money directly. A great way to see the new cross-border relationships is by looking at the price of natural gas in Europe vs. that in the US in the wake of an explosion at a US LNG export terminal. As soon as US output capacity became restricted, prices in Europe shot up, while those in the US tumbled. Energy sovereignty is the new monetary sovereignty.

Capital vs labour

Starting in spring of 2007, the unemployment rate in the US started to creep up, and then a few months later the S&P 500 hit its pre-GFC peak. This time around, the roles are reversed. Stocks have been in a slump for almost 8 months now, while the unemployment rate refuses to budge higher.

Industrial production

In the US, industrial production started falling off a cliff right at the beginning of 2008. This time around, it's still hitting new highs. 

Wage gain distribution

Wage gains for lower-paid workers are far outstripping those of higher earnings according to the Atlanta Fed's wage growth tracker. This is very different from the post-2008 environment.

Whether the US or other parts of the world formally enter a recession or not is TBD. But regardless, this is a very different environment, with its own set of stresses and pressure points.


Disclaimer: This article first appeared on Bloomberg, and is published by special syndication arrangement

Top News / World+Biz / Global Economy

Recession / Recession fears / economic recession / global recession

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Burnt out cars and damaged buildings are all that’s left of this street in Ramat Gan Credit: AP
    Iran threatens to strike US, UK, and French bases if they help defend Israel
  • Chief Adviser Professor Muhammad Yunus of the Bangladesh interim government. Sketch: TBS
    UK lawyers hired to recover stolen money: CA Yunus
  • File Photo: Rajib Dhar
    Dengue claims one life, 169 hospitalised in 24hrs

MOST VIEWED

  • Energy adviser Fouzul Kabir Khan with other government officials during a visit to Sylhet gas field on 13 June 2025. Photo: TBS
    I would disconnect gas supply to every home in Dhaka if I could: Energy adviser
  • BNP Acting Chairperson Tarique Rahman and Chief Adviser  Muhammad Yunus meet at Dorchester Hotel in London, UK on 13 June 2025. Photo: CA Press Wing
    National polls possible in 2nd week of February, agree Yunus, Tarique in 'historic' London meeting
  • Rescuers work at the scene of a damaged building in the aftermath of Israeli strikes, in Tehran, Iran, June 13, 2025. Majid Asgaripour/WANA (West Asia News Agency) via REUTERS
    Tehran retaliates with 100 drones after Israel strikes Iran's nuclear facilities, kills military leaders
  • From fact-checker to fact-checked: CA Press Wing’s turn in the hot seat
    From fact-checker to fact-checked: CA Press Wing’s turn in the hot seat
  • UK Prime Minister Keir Starmer, Chief Adviser Muhammad Yunus
    Disclosure of unconfirmed Yunus-Starmer meeting shows ‘diplomatic imprudence’: Analysts
  • Flight AI 379 had landed. File Photo: Hindustan Times
    Day after Ahmedabad crash, Air India flight makes emergency landing in Thailand after bomb threat

Related News

  • Goldman Sachs cuts US recession odds to 35% from 45% on trade truce optimism
  • Risk of global economic recession surges on US tariff shockwaves: Reuters poll
  • In case of a global recession, how might Bangladesh fare?
  • Goldman retracts recession forecast following Trump’s tariff pause
  • Goldman Sachs raises odds of US recession to 45%

Features

Photos: Collected

Kurtis that make a great office wear

1d | Mode
Among pet birds in the country, lovebirds are the most common, and they are also the most numerous in the haat. Photo: Junayet Rashel

Where feathers meet fortune: How a small pigeon stall became Dhaka’s premiere bird market

3d | Panorama
Illustration: Duniya Jahan/ TBS

Forget Katy Perry, here’s Bangladesh’s Ruthba Yasmin shooting for the moon

3d | Features
File photo of Eid holidaymakers returning to the capital from their country homes/Rajib Dhar

Dhaka: The city we never want to return to, but always do

5d | Features

More Videos from TBS

Israel-Iran conflict: 45-year enmity now taking full military form

Israel-Iran conflict: 45-year enmity now taking full military form

18m | Others
How did the United States help prevent an Iranian attack?

How did the United States help prevent an Iranian attack?

1h | TBS World
Why does Bangladesh lack a plan for its overseas labour market?

Why does Bangladesh lack a plan for its overseas labour market?

28m | TBS Programs
Iran's counterattack: US ambassador visits shelter 5 times

Iran's counterattack: US ambassador visits shelter 5 times

1h | TBS World
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net