With rising inflation and interest rates, you may be worried about the status of the U.S. economy. Many Americans are struggling to get by, and the possibility of an economic recession is troubling. This article addresses the various indicators of economic decline and stability in today’s market. We also compiled some tips to help you prepare for a grim economy.
The Good News
Despite growing concerns, the U.S. GDP is up 0.4% in the second quarter of 2023. This is the fourth consecutive quarter that the GDP has seen growth. Since this is a key sign of economic health, it is reassuring news for those that fear a fiscal downturn. Additionally, the unemployment rate is currently very low. There are approximately 10 million job openings, and only about 6 million unemployed Americans. The strong job market has helped to spur economic growth in spite of inflation. Consumer spending is also at a healthy level, which has boosted stock market gains.
The Bad News
Although economists agree that we are not in currently in a recession, there are signs that we will experience one soon. In an effort to reduce inflation, the Federal Reserve has hiked up interest rates at the fastest rate in 40 years. Some financial analysts believe that the increase in interest rates will trigger a recession in the latter half of the fiscal year. The current yield curve indicates that short-term securities have better rates than long-term ones. Based on historical data, this is a telling sign of economic collapse.
Always be Prepared.
It's impossible to predict a recession with certainty. The U.S. economy is thoroughly complicated, and there are a lot of unknowns. Your best option is to stay prepared by practicing good financial habits. If you want some extra cash, this site pays up to $25 per survey.
Maintaining an emergency savings account can keep you afloat when the economy goes south. Most experts recommend that you keep three to six months’ worth of living expenses on hand. These funds should be stored in a conveniently accessible account. The amount will vary depending on your cost of living and income. You can grow your rainy-day fund by avoiding frivolous purchases and keeping track of your finances.
Since food prices have seen some of the highest levels of inflation, consider cultivating your own fruits and vegetables. Even if you live in an apartment, you can use containers to house your crops. Gardening will increase your self-reliance as prices continue to climb.
If you can afford to pay off debts, pay them in full. You don’t want to worry about extraneous payments if the economy goes south. By staying on top of your bills, you will put yourself in a better position to navigate any economic conditions. If your income is barely enough to cover your necessary expenses, consider switching jobs or finding a way to advance your career. Even a small raise could help you build your financial buffer at a faster pace.