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Fri. 24 Jun 2022, 5:34pm ET Benzinga News, Economics

The S&P 500 recently entered market correction territory with a 20% drop from all-time highs. The new debate is if the U.S. could enter a recession in 2022, or to some if we are already in a recession.

Searches for the word recession are hitting huge levels, suggesting people are increasingly worried about the potential of the economic downturn.

What Happened: Searches for the term "recession" on Google, a unit of Alphabet Inc (NASDAQ:GOOG)(NASDAQ:GOOGL), have spiked to levels not seen since March 2020. The sharp spike was pointed out on Twitter Inc (NYSE:TWTR) by Accelerate CEO Julian Klymochko this week.

“It’s a coincident indicator, meaning that it is highly likely we are in a recession right now,” Klymochko said.

Searches for recession are at the highest level of 2022 and are now on par with searches for the term back in 2008 and 2009 when the U.S. was officially in a recession. Google trends show current searches trail only those for the term in March 2020 during the COVID-19 pandemic.

Increased searches for recession comes as the S&P 500 dropped to a new low last seen in March 2021 and hit a level of 21% down from its all-time high, officially hitting a market correction. The SPDR S&P 500 ETF Trust (NYSE:SPY), which tracks the index, was down 21% year-to-date last week before rebounding slightly to end the week now down 18% for the year.

Related Link: Here's How Long Bear Markets Last On Average And What Returns Investors Could See After 

Are We In a Recession?: The definition for recession is widespread and often includes items such as slowed growth, negative GDP, high unemployment and slowed spending happening over the course of several months.

While the U.S. hit an official market correction, many stop short of declaring the current period a recession.

LPL Financial Chief Marketing Strategist Ryan Detrick showed data that it takes 19 months to recover from bear market losses completely. The past three bear markets took less time with five, four and four months, respectively, needed to gain back from losses.

“We do not see a recession on the horizon, which could be a clue returns could be strong going out a year,” Detrick said.

Data shows that only two times out of 24 has the market been negative for the year after the correction.

Tesla Inc (NASDAQ:TSLA) CEO Elon Musk commented on Twitter recently that a recession is a necessary part of the economic cycle. Musk cited the impact of the work-from-home culture during the COVID-19 pandemic and stimulus money.

“It has been raining money on fools for too long. Some bankruptcies need to happen,” Musk said.

Ark Invest CEO Cathie Wood, who is behind the popular flagship Ark Innovation ETF (NYSE:ARKK), said recently the U.S. is already in a recession.

Wood noted that inventories could “bloat real GDP in the second quarter,” which could hurt growth for the rest of 2022.

Wood also criticized the Fed for relying on indicators such as the consumer price index, which lag other indicators.

“The Fed seems to be worried more about its legacy than the economy: it is ignoring deflationary and dangerous signals.”

Shark Tank investor Kevin O’Leary offered a different take recently saying the U.S. is not in a recession or close.

“You’re all wrong,” O’Leary said. “This is a more productive, higher gross margin economy, and nobody wants to give it credit.”

O’Leary pointed to an increase in products being delivered direct-to-consumer, increasing margins for many companies.

Photo by Firmbee.com on Unsplash