If you look at the news, you’ll see an increasing amount of chatter about the possibility of recession. Recessions are a normal part of the economic cycle, and they’re not avoidable indefinitely. Recessions are going to happen. It’s not a question of “If” but rather questions of when and how long.
Economists can only pronounce a recession once the economy is already in one. That’s because “trailing indicators” are the most reliable way to identify the economy’s entry into the negative part of the economic cycle. Traditional indicators of recession include interest rates, housing starts, inflation, bond prices, rising unemployment, and retail sales have all typically been used to forecast an economic downturn.
If you like more modern indicators, an inverted yield curve is one of the signs you’re looking for. That happens when longer-term bonds have a lower interest rate than shorter-term bonds do. Usually, longer bonds have larger interest rates. The initial jobless claims trend is another contemporary indicator that something is wrong.
Right now, about three-fourths of Americans believe a recession is on the horizon., and they’re looking for ways to prepare.
One of the best ways for individual workers to prepare for recession is by polishing their resumes. During a recession, people lose their jobs, businesses close, etc. Additionally, people take on additional work to combat the effects of inflation; and to increase their personal savings or pay down debt.
Recession brings rare opportunities to community colleges
Community colleges have a massive opportunity right now. The smart institution will offer workshops to the community on updating one’s resume; financial planning; and building an educational plan that tweaks skills, or sets a person on a new career path. Helping people identify and correct skill gaps is one way to get them into the classrooms. It also provides a tremendous public service and positions the community college as a resource during a downturn.
A community college doesn’t have to wait for a recession to hit to help community members prepare for a recession. Even if one doesn’t materialize – and some economists think a recession is not inevitable – there’s no harm in learning or fine-tuning workplace skills.
If recessions are going to be part of a community college’s enrollment strategy, the institution should at least develop the necessary skills and tools to take advantage of changing economic conditions. Waiting until the economists confirm a recession puts institutions behind the 8-ball when it comes to mounting a credible response.
Photo Credit: Damian Gadal, via Flickr