Butler Center's Fady Mansour Speaks to WRBL News3 about Consumer Confidence Slump

According to a recent report by Fionna Magee of WRBL News3, national economic indicators suggest the U.S. may be nearing another slowdown, with Moody’s Analytics reporting that 22 states — including Georgia — are either already in recession or on the verge of entering one. According to Magee, economists say the most important factor shaping how deep a recession becomes isn’t just the numbers, but consumer confidence. “A recession is technically a decline in GDP for two consecutive quarters,” said Fady Mansour, associate professor of economics in the Turner College and Director of the Butler Center for Research and Economic Development. “The biggest and most important factor during a recession is confidence. This is what makes people slow down spending and businesses slow down investments.” When consumers pull back, demand falls, hiring slows and businesses become more cautious — creating a ripple effect that can worsen economic conditions. Mansour also told Magee that confidence not only affects spending today but also determines how quickly the economy can recover. “How are you going to spend if you see many people unemployed or layoffs in your job?” he said. “Even if you give them the money, they will not spend it.” Mansour added that not all recessions look the same — the depth of the downturn depends on the structural issues driving it and how optimistic consumers feel about the future. “We can experience a bad recession or a mild recession,” Mansour said. “It depends on what type of structural problem we experience.”