What is a ‘richcession’? And will it spare the economy from a full-blown downturn?

globalnews.ca:

Forecasters have had an eye out for a recession for months, but it has yet to happen as the Canadian economy has proven resilient in the face of high inflation and rising interest rates. 

A technical recession is often defined as two straight quarters of negative gross domestic product (GDP) growth.

But the country may be facing a different type of recession as some sectors, like tech, have been feeling the pinch.

A string of high-profile tech layoffs, including at Google Canada, Dell and Shopify, have led experts to ask – is Canada in the midst of a “richcession”?

“A ‘richcession’ occurs when the wealthy get hit more than usual. And this is uncommon because normally in a recession, we see low-income households and, to an extent, the middle class hurting a lot more, whereas for the wealthy it is just a minor inconvenience,” Tu Nguyen, economist and ESG director at RSM Canada, told Global News.

One forecaster said all recessions usually have some sectors that tend to do worse than others, but noted the pendulum might be swinging in the other direction.

“For example, the pandemic had a severe effect on the service class of workers as restaurants and retail establishments were closed down. A lot of workers that tended to be in the lower income categories were laid off and therefore had to be supported by other government measures,” said Ted Mallett, director of economic forecasting at the Conference Board of Canada.

Nyugen said there is evidence that Canada may already be seeing a “richcession” as workers in higher-paying fields have been dealing with the brunt of job losses.

“Since the pandemic happened, a lot of government support has poured out and is really helping a lot of low-income families to pay off debt, to sack