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But how can you tell whats actually happening and whats not worth worrying about?
Here are six ways to tell if a recession is coming andwhat you could do about it.
I do not think a recession is coming but I do think the recent slowdown will continue.
There are parts of the economy that are not growing manufacturing and housing are still struggling, he outlined.
Other parts likehealthcare and government spendingare still expanding.
The outcome is overall anemic growth, but not yet decline.
These stresses are significant.
Compared to the 2008 financial crisis, they are better recognized and probably not as severe.
Kyle also pointed out another concerning factor the stock market.
The stock market is currently at a very high level as a multiple of GDP, the professor shared.
If there is a decline in corporate earnings, stock prices could fall a great deal.
Professor Jonathan Ernest ofCase Western Reserve Universityoffered a more optimistic perspective.
None of these measures would traditionally signal an imminent recession.
6 Key Recession Indicators
Given these differing views, what signs should we be watching for?
Here are six key indicators highlighted by our experts.
The SAHM Rule was triggered in each of the last 9 recessions since 1960.
Banking System Stress
Kyle emphasized the importance of monitoring the banking system.
Currently, there are some stresses in the banking system.
Consumer sentiment is the strongest indicator about what might happen in the future.
We live in a consumer-based economy, which accounts for almost two-thirds of GDP, he said.
When consumer sentiment turns negative, it could signal a slowdown in spending.
Housing Market Trends
Termini also thinks housing trends are well worth looking at.
They create a ripple effect that impacts other industries across broad segments of the economy.
This indicator can confirm changes in either consumer sentiment or housing starts.
When its positive, it bodes well for the economy, he said.
When its negative, check to see if confirms the direction of either consumer sentiment or housing starts.
Heres what you should consider.
Be Cautious With Major Financial Decisions
Kyle has some specific, actionable advice.
Now is probably not the time to buy a new house.
Listings are increasing, which suggests soft housing prices are ahead.
If you are in your 40s, something like 60-percent stocks, 40-percent bonds, is typically wise.
As you eliminate debt, you free upmonthly cash flow.
Kyle agreed, adding: Avoid credit card debt.
Interest rates on credit cards are very high.
take a stab at create a cash cushion of savings.
Consider your age and time horizon, he said.
Typically, the younger you are, the more you might lean into stocks for long-term growth.
Keep Perspective
As in all things, its important to keep calm and carry on.
Recessions are part of thenormal business cycle.
Recessions are always temporary, while expansions are enduring.
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