Weekend Reading: The Biggest Argument in Finance Right Now

Posted: 07/22/2022

|Stock Market |"A Wealth of Common Sense" Articles

This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.

Weekend Reading

The latest media headlines span wide on the possibility of a looming recession. Some claim we are already in one, some say it’s on the horizon and others state it’s possible we avoid it entirely.

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Mixed reviews: So, what’s the truth? A group of economists in the National Bureau of Economics (NBER) are the ones to officially call a recession, and they utilize a variety of measures to determine that outcome. The criteria is complicated, but it essentially comes down to income and employment. If both look grim, economic output does as well. Currently, however, we’re seeing slow economic output while strangely experiencing a relatively confident income and labor market as well.

Be prepared for any possibility: On one hand, some economic experts believe a few indicators may point to a recession, while the market doesn’t. On the other, employment numbers may simply be lagging behind, and more data needs to be collected. At present, the numbers don’t scream “recessionary”, but the pendulum could swing either way. Even if we do enter a recession, it’s not an end-all, be-all.

Focus on your financial situation: Determining if are actually in a recession is more complex than two quarters of negative GDP growth. Furthermore, does it even matter if we are in a recession or not?

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