--- title: Does This Bear Market Mean a Recession Is Coming? description: During the last half century, bear markets were accompanied by recessions 83% of the time, according to a Morningstar analysis. authors: - name: Mallika Mitra role: Contributing Editor url: https://money.com/author/mallika-mitra/ bio: Mallika Mitra is a contributing editor for Money, based in Chicago. She has covered investing and retirement for seven years and her work has appeared in CNBC, Bloomberg, Kiplinger, AARP, Barron’s, Bankrate, The Daily Upside, ETF.com, The Bond Buyer, PLANADVISER, PLANSPONSOR and Investopedia. education: Craig Newmark Graduate School of Journalism at CUNY Kalamazoo College at_money_since: 2020 articles: 395 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - CNBC - Bloomberg - Kiplinger - Barron's - Bankrate - WGN-TV - CBS News Radio - This Morning With Gordon Deal - Everyone's Talkin' Money social: - https://twitter.com/mitra_mallika - https://www.linkedin.com/in/mallika-mitra-4577a386/ editors: - name: Martha C. White role: Writer url: https://money.com/author/martha-c-white/ education: BA, English, Princeton University at_money_since: 2015 articles: 354 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Education - Federal Reserve Rate Cuts - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes - Technology published: '2022-06-23T17:56:14.000Z' modified: '2024-01-10T14:22:28.000Z' section: Economy and Politics tags: - News word_count: 630 canonical: https://money.com/are-bear-markets-followed-by-recessions/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Bear Walking On Downward Pointing Stocks Graph](https://img.money.com/2022/06/News-Bear-Markets-Lead-To-Recessions.jpg) A bear market is bad enough. But there's some more bad news in store: Bear markets are typically followed by recessions. During the last half century, bear markets were accompanied by recessions 83% of the time, according to [an analysis](https://www.morningstar.com/articles/1098731/do-bear-markets-lead-to-recessions) by Morningstar vice president of research John Rekenthaler. The National Bureau of Economic Research (NBER), which declares when U.S. recessions begin and end, [defines a recession](https://www.nber.org/business-cycle-dating-procedure-frequently-asked-questions) as "a significant decline in economic activity that is spread across the economy and that lasts more than a few months." The typical metric used is quarterly gross domestic product (GDP), the value of goods and services produced in the U.S. The [S&P 500](https://money.com/how-to-invest-in-sp500/) — a benchmark commonly used to measure how stocks are doing overall — entered a [bear market](https://money.com/investing-moves-bear-market-stocks/) last week, meaning that its value fell at least 20% from the previous high. The index is currently down around 22% for the year as investors asses what [interest rate hikes](https://money.com/fed-rate-hike-investor-advice/) and [sky-high inflation](https://money.com/may-2022-inflation-eggs-airfare/) mean for their portfolios. The Federal Reserve [hikes interest rates](https://money.com/fed-interest-rate-hike-june-2022/) to bring down rising costs — but there's always the chance that raising rates can tip the economy into a recession. Right now, that's definitely a concern. This week, Tesla CEO Elon Musk called a U.S. recession "inevitable" in an interview with [Bloomberg News](https://www.bloomberg.com/news/videos/2022-06-21/musk-says-near-term-recession-is-more-likely-than-not), and said it's more likely than not that we'll see one in the near term. JPMorgan Chase & Co. CEO Jamie Dimon has [warned](https://www.cnn.com/2022/06/01/economy/jamie-dimon-jpmorgan-chase-economy/index.html) of an economic "hurricane." In June, nearly 40% of 49 macroeconomics experts [polled](https://www.igmchicago.org/wp-content/uploads/2022/06/RESULTS-2022-06-06-Survey-05.pdf) by *The Financial Times* and the Initiative on Global Markets at the University of Chicago’s Booth School of Business said a recession will be declared in the first half of 2023, and nearly a third said it would happen in the second half of next year. Even Fed chairman Jerome Powell [said](https://apnews.com/article/inflation-economy-prices-jerome-powell-2a540e8fd56908ffe9ee89da48efdb9d) a recession is "certainly a possibility," while testifying to the Senate Banking Committee this week. ## Will we have a recession this year? While Rekenthaler notes that five of the six previous bear markets were followed by recessions, he says there are some caveats. If we look at the last 10 times the stock market fell at least 18% — not quite the 20% required to be considered a bear market — four of the downturns weren't followed by a recession, two accompanied "mild recessions" and only four were associated with what Rekenthaler characterizes as "the real thing." "By this measure, the odds of a truly bad outcome decline to 40%, as opposed to the original 83%," Rekenthaler wrote in his analysis. "Better news indeed." He also points out the recession associated with the dot-com bubble bursting in 2000 was short and shallow. What does this mean for the present day? As of now, economic experts remain split on whether we'll experience a recession — or whether or not we're already in one, since the NBER doesn't call them in real time. Despite the gloomy predictions from CEOs like Dimon and Musk, business research firm The Conference Board [believes](https://www.conference-board.org/research/us-forecast) that GDP will be positive next quarter. While that could be over-optimistic, Rekenthaler says "the signs of a recession are further removed than they were during the bear markets of 1974, 1982 and 2008." For instance, bear market recessions tend to arrive after the unemployment rate begins to increase, which [we're not seeing](https://www.npr.org/2022/06/03/1102676411/job-labor-market-unemployment-rate-inflation). Rekenthaler concludes that while a recession this year is certainly a possibility — and becomes even more so with every interest rate hike — he remains upbeat about near-term economic signals. "History suggests that the current bear market is likely a false alarm," he says. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/are-bear-markets-followed-by-recessions/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Economy and Politics", "item": "https://money.com/economy-and-politics/" }, { "@type": "ListItem", "position": 3, "name": "Financial Markets", "item": "https://money.com/financial-markets/" }, { "@type": "ListItem", "position": 4, "name": "Does This Bear Market Mean a Recession Is Coming?" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/are-bear-markets-followed-by-recessions/#webpage", "url": "https://money.com/are-bear-markets-followed-by-recessions/", "name": "Does This Bear Market Mean a Recession Is Coming?", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2022-06-23T17:56:14.000Z", "mainEntity": { "@id": "https://money.com/are-bear-markets-followed-by-recessions/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/are-bear-markets-followed-by-recessions/#breadcrumb" }, "dateModified": "2024-01-10T14:22:28.000Z" }, { "@type": "NewsArticle", "headline": "Does This Bear Market Mean a Recession Is Coming?", "articleSection": "Economy and Politics", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2022/06/News-Bear-Markets-Lead-To-Recessions.jpg", "width": 2880, "height": 1920, "caption": "News-Bear-Markets-Lead-To-Recessions" } ], "author": [ { "@type": "Person", "name": "Mallika Mitra", "url": "https://money.com/author/mallika-mitra/", "@id": "https://money.com/author/mallika-mitra/#author", "description": "Mallika Mitra is a contributing editor for Money, based in Chicago. She has covered investing and retirement for seven years and her work has appeared in CNBC, Bloomberg, Kiplinger, AARP, Barron’s, Bankrate, The Daily Upside, ETF.com, The Bond Buyer, PLANADVISER, PLANSPONSOR and Investopedia.\r\n", "image": "https://img.money.com/2020/05/Headshot.png?w=640&h=640&crop=1", "email": "mallikaamitra@gmail.com", "jobTitle": "Contributing Editor", "alumniOf": "Craig Newmark Graduate School of Journalism at CUNY Kalamazoo College", "subjectOf": [ { "@type": "WebPage", "url": "https://cnbc.com", "name": "CNBC" }, { "@type": "WebPage", "url": "https://bloomberg.com", "name": "Bloomberg" }, { "@type": "WebPage", "url": "https://kiplinger.com", "name": "Kiplinger" }, { "@type": "WebPage", "url": "https://barrons.com", "name": "Barron's" }, { "@type": "WebPage", "url": "https://bankrate.com", "name": "Bankrate" }, { "@type": "WebPage", "url": "https://wgntv.com/midday-news/your-money-matters-why-is-crypto-so-popular/", "name": "WGN-TV" }, { "@type": "WebPage", "url": "https://podcasts.apple.com/us/podcast/the-wall-street-journal-travel-editor-scott-mccartney/id1500053390?i=1000505352440", "name": "CBS News Radio" }, { "@type": "WebPage", "url": "https://thismorningwithgordondeal.com/b/Lots-of-People-Think-NFTs-Are-Cryptocurrency-and-Theyre-Wrong/306379835851553325.html", "name": "This Morning With Gordon Deal" }, { "@type": "WebPage", "url": "https://podcasts.apple.com/us/podcast/how-to-invest-in-a-recession/id957163760?i=1000596422109", "name": "Everyone's Talkin' Money" } ], "sameAs": [ "https://twitter.com/mitra_mallika", "https://www.linkedin.com/in/mallika-mitra-4577a386/" ], "worksFor": { "@id": "https://money.com/#organization" } } ], "publisher": "https://money.com/#organization", "datePublished": "2022-06-23T17:56:14.000Z", "description": "During the last half century, bear markets were accompanied by recessions 83% of the time, according to a Morningstar analysis.", "abstract": "During the last half century, bear markets were accompanied by recessions 83% of the time, according to a Morningstar analysis.", "@id": "https://money.com/are-bear-markets-followed-by-recessions/", "inLanguage": "en-US", "dateModified": "2024-01-10T14:22:28.000Z", "editor": [ { "@type": "Person", "name": "Martha C. White", "url": "https://money.com/author/martha-c-white/", "@id": "https://money.com/author/martha-c-white/#author", "image": "https://img.money.com/2014/01/martha.png?w=350&h=430&crop=1", "jobTitle": "Writer", "alumniOf": "BA, English, Princeton University", "worksFor": { "@id": "https://money.com/#organization" } } ], "wordCount": 630, "keywords": [ "News" ], "about": [ { "@type": "Thing", "name": "Political economy", "sameAs": [ "https://en.wikipedia.org/wiki/Political_economy" ] }, { "@type": "Thing", "name": "Financial market", "sameAs": [ "https://en.wikipedia.org/wiki/Financial_market" ] }, { "@type": "Thing", "name": "Economy", "sameAs": [ "https://en.wikipedia.org/wiki/Economy" ] } ] } ] } ```