The bad news is, with inflation seemingly a lot stickier than everyone expected, the Fed is going to need to keep lifting interest rates. And that rate hike campaign may very well drag the economy into a recession.
The good news is, recession is what sparks innovation. According to Morgan Stanley, roughly half of Fortune 500 companies were founded in times of recession or economic crisis.
“Necessity is the mother of invention. This is why warfare and space exploration have routinely spawned radical new technologies which, over time, have become almost mundane in consumer mass market,” says the U.S. investment bank.
Here’s their compilation of companies created during periods of economic stress.
1927-1933, -27% GDP
Advance Auto, CHS, Markel, First Energy, Century Link, Publix, American Airlines, Baxter, Allstate, United Airlines
1937-1939, -18% GDP
T. Rowe Price, Caesers, Progressive, REI, Cumberland, Dillard’s, Owen Corning, Tractor Supply, Darden, Fannie Mae, HP
1945, -12% GDP
JanPak, U-Haul, Mattel, Cantor Fitzgerald, Constellation, Kaiser Permanente
1949, -2% GDP
Buckle, American Signature, True Value, Rollins, Robert Half, Hexcel, Dick’s Sporting Goods, Manpower, Pottery Barn, ADP
1953, -3% GDP
Burger King, Autoliv, Sargento, Umpqua, Apache, Loews, Lennar
1957-1958, -4% GDP
Hyatt, Anixter, O’Reilly Automotive, Trader Joe, Visa
1969-1970, -3% GDP
Domino’s, Century 21, AMD, Gap, Sysco, Danaher, Humana, Freddie Mac, FedEx
1973-1975, -3% GDP
Bain, Foot Locker, UnitedHealth, TD Ameritrade, Microsoft, Charles Schwab
1972-1982, -2% GDP
WWE, AMC, Lam Research, DISH, Amgen, Molina, Activision Blizzard, MTV, E-Trade, EA, IQVIA, Adobe
1999-2001, -1% GDP
Workfront, Medallia, Just Eat, MailChimp, Bloom, Vonage, Salesforce
2007-2009, -5% GDP
ZenDesk, US Foods, Cloudera, AirBNB, Groupon, Slack, Square, Uber
Source: Morgan Stanley