Is it a ‘richcession’? Or a ‘rolling recession’? Or maybe no recession at all?

WASHINGTON — The warnings have been sounded for more than a year: A recession is going to hit the United States. If not this quarter, then by next quarter. Or the quarter after that. Or maybe next year.

So is a recession still in sight?

The latest signs suggest maybe not. Despite much higher borrowing costs, thanks to the Federal Reserve’s aggressive streak of interest rate hikes, consumers keep spending, and employers keep hiring. Gas prices have dropped, and grocery prices have leveled off, giving Americans more spending power.

The economy keeps managing to grow. And so does the belief among some economists that the United States might actually achieve an elusive “soft landing,” in which growth slows but households and businesses spend enough to avoid a full-blown recession.

“The U.S. economy is genuinely displaying signs of resilience,” said Gregory Daco, chief economist at EY, a tax and consulting firm. “This is leading many to rightly question whether the long-forecast recession is really inevitable or whether a soft-landing of the economy” is possible.

Analysts point to two trends that may help stave off an economic contraction. Some say the economy is experiencing a “rolling recession,” in which only some industries shrink while the overall economy remains above water.

Others think the U.S. is experiencing what they call a “richcession”: Major job cuts, they note, have been concentrated in higher-paying industries like technology and finance, heavy with professional workers who generally have the financial cushions to withstand layoffs. Job cuts in those fields, as a result, are less likely to sink the overall economy.

Still, threats loom: The Fed is all but certain to keep raising interest rates, at least once more, and to keep them high for months, thereby continuing to impose heavy borrowing costs on consumers and businesses. That’s why some economists caution that a full-blown recession may still occur.

Here’s how it could all play out in the United States:

It’s a rolling recessing

When different sectors of the economy take their turns contracting, with some declining while others keep expanding, it’s sometimes called a “rolling recession.” The economy as a whole manages to avoid a full-fledged recession.

The housing industry was the first to suffer a tailspin after the Fed began sending interest rates sharply higher 15 months ago. As mortgage rates nearly doubled, home sales plunged. They’re now 20% lower than they were a year ago. Manufacturing soon followed. And while it hasn’t fared as badly as housing, factory production is down 0.3% from a year earlier.

And this spring, the technology industry suffered a slump, too. In the aftermath of the pandemic, Americans were spending less time online and instead resumed shopping at physical stores and going to restaurants more frequently. That trend forced sharp job cuts among tech companies such as Facebook’s parent Meta, video conferencing provider Zoom and Google.

At the same time, consumers ramped up their spending on travel and at entertainment venues, buoying the economy’s vast service sector and offsetting the difficulties in other sectors. Economists say they expect such spending to slow later this year as the savings that many households had amassed during the pandemic continue to shrink.

Yet by then, housing may have rebounded enough to pick up the baton and drive economic growth. There are already signs that the industry is starting to recover.

And other sectors should continue to expand, providing a foundation for overall growth. Krishna Guha, an analyst at Evercore ISI, notes that some areas of the economy — from education to government to health care — are not so sensitive to higher interest rates, which is why they are still hiring and probably will keep doing so.

It’s a ‘richsession’

Affluent Americans aren’t exactly suffering, particularly as the stock market has rebounded this year. Yet it’s also true that the bulk of high-profile job losses that began last year have been concentrated in higher-paying professions. That pattern is different from what typically happens in recessions: Lower-paying jobs, in areas like restaurants and retail, are usually the first to be lost and often in depressingly large numbers.

That’s because in most downturns, as Americans start to pull back on spending, restaurants, hotels and retailers lay off waves of workers. As fewer people buy homes, many construction workers are thrown out of work. Sales of high-priced manufactured goods, such as cars and appliances, tend to fall, leading to job losses at factories.

This time, so far, it hasn’t happened that way. Restaurants, bars and hotels are still hiring — in fact, they have been a major driver of job gains. And to the surprise of labor market experts, construction companies are also still adding workers despite higher borrowing rates, which often discourage residential and commercial building.

Instead, layoffs have been striking mainly white collar and professional occupations. Uber Technologies said last week that it will cut 200 of its recruiters. Earlier this month, GrubHub announced 400 layoffs among the delivery company’s corporate jobs.

Many of the affected employees are well-educated and likely to find new jobs relatively quickly, economists say, helping keep unemployment down despite the layoffs.