In last week’s article, we discussed inflation and whether or not it’s a good time to buy a house. In this week’s article, we’re going to be discussing whether or not the fears of a looming recession are overblown. We will be referencing this article from Forbes
During recent months, the stock market has taken a significant hit due to the fears of an imminent recession.
What Is a Recession?
A recession is a significant decline in economic activity that lasts for months or even years. A recession is declared when a nation’s economy experiences negative gross domestic product (GDP), rising levels of unemployment, falling retail sales, and shrinking measures of income and manufacturing for an extended period of time.
Are Fears of a Recession Exaggerated?
Well, some experts are optimistic about the economy’s future, predicting that a recession can be avoided if inflation continues to moderate and consumer spending remains stable.
What We Know…
Investors have been facing recession warnings ever since the economy contracted by 1.4% in the first quarter of 2022, but the economic outlook isn’t as dire as it might seem.
That being said, most forecasters expect GDP growth of roughly 2% to 3% in the current quarter, which would be a very nice rebound from last quarter.
Many experts are warning that the economy is heading for a hard landing as the Fed tries to combat inflation.
But rather than shrinking, the economy is actually slowing down —and could, in turn, avoid a recession.