All those economists who think the US is headed for recession could be wrong. Instead, what could happen, according to one school of thought, is multiple recessions reverberating over the coming year. Dubbed “rolling recessions,” the idea is that rather than shrinking broadly and all at once, the economy can see different sectors decline in succession, one after the other. While headline GDP may not show negative quarters, some parts of the economy, such as housing, manufacturing and corporate profits, will function and feel like they are in recession. It’s something the US has seen before, but these are unusual times. “We may not see an outright recession because everything is shrinking at the same time as before,” said Sung Won-soon, a professor of finance and economics at Loyola Marymount University and chief economist at SS Economics. “It would take some kind of disaster, at home or abroad, to have a simultaneous recession. I think we’re going to see a rolling decline going forward.” Uncertainty about how the economy will shape up comes as market participants await the next official reading on growth. The Commerce Department is due to release its preliminary estimate of fourth-quarter GDP growth on Thursday, with economists polled by Dow Jones expecting an annual growth of 2.8%. That would end a volatile year that saw the first two quarters start with negative GDP readings, matching the long-standing definition of a recession. However, a robust job market and unexpected consumer resilience have kept the economy afloat amid persistently high inflation. This is the year economists expect that to change. How it will happen “It started with housing and inventory and manufacturing, as evidenced by industrial production,” Soh said. “Now consumer spending and then eventually business spending will start to come down.” Indeed, ISM manufacturing readings showed two straight sub-50 contraction readings after 29 consecutive months of expansion. The ISM services index also entered contraction territory in December after recording 30 consecutive months of growth. Similarly, housing numbers have been dismal. Building permits fell 30% year-over-year, while starts fell nearly 22%, according to Census data. But even among economists who expect a standard recession, the forecast is that it will be relatively benign, versus some of the downturns seen over the past few decades. “A global slowdown is underway and we won’t be out of the woods anytime soon. But we’re glad we never wrote off a major global crash,” Seth Carpenter, chief global economist at Morgan Stanley, said in a recent client note. “The slowdown from last year to this year is very, very real, but it doesn’t look like a disaster.” Federal Reserve officials were hoping for that best-case scenario as they raised interest rates to tame inflation. Most of them have said they expect the economy to avoid a recession, although Fed Governor Christopher Waller said last week that a mild recession would be acceptable as long as it meant inflation was also falling. The National Bureau of Economic Research is generally considered the arbiter of recessions and expansions, and will have its arms wide open to current economic trends when deciding how to classify this period. “We continue to think the relevant debate is not so much recession vs. soft landing, but whether a recession can continue without an official recession announcement from the NBER,” Liz Ann Saunders, chief investment strategist at Charles Schwab, wrote recently. analysis. Saunders is a proponent of the “rolling recession” theory and noted that stocks can perform well even in recessions. “We see the best-case scenario as a series of continued weakness in the economy offsetting pockets of strength,” he added. “We’re more likely to get a call from the NBER, which is historically well after a recession starts.” A traditional recession is expected Of course, there are critics of the “rolling recession” theory. Joseph Lavorgna, chief U.S. economist at SMBC Nikko Securities America, expects a more traditional recession, especially given the precarious state of the housing market and shrinking manufacturing. “Have we ever had a period where both housing and manufacturing declined at the same time and we didn’t have a recession?” he said. “Right now, the only way to avoid a recession is for inflation to collapse suddenly and unexpectedly.” Collapse of inflation is unlikely. In fact, there are some economists who believe that the current easing of inflation will hit a wall when the inflation rate falls to around 4%. LaVorgna, the National Economic Council’s chief economist under former President Donald Trump, expects some shocks in the labor market as well, which shows the economy has lost about 714,000 construction jobs due to the housing collapse. Still, LaVorgna doesn’t expect a big downturn and said there’s even an outside chance that inflation could come down quickly and the economy could avoid a recession. “The stock market is banking on it, so you can’t say it can’t happen,” he said. “Thinking in terms of probability, I just think it’s unlikely.” Correction: Joseph Lavorgna was the chief economist at the National Economic Council under former President Donald Trump. An earlier version misstated his title.