BE READY FOR RECESSION WITH FINANCES

By: Riya Gote

A to Z Experience

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Oct 2022

Get ready for a recession with your finances Despite a positive GDP data, financial advisors should be cautious: "Prepare for more turbulence"

The Bureau of Economic Analysis calculated on Thursday that the third quarter's growth in the nation's gross domestic product was 2.6% on an annualised basis.

You know what's the cause? - This expansion comes after the economy shrank in the first half of the year.

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But economists and financial advisers warn that consumers shouldn't be mislead into a false feeling of security.

According to estimates released on Thursday by the Bureau of Economic Analysis, the gross domestic product—grew by 0.6% from July through September.

Image Source: Unsplash

Gross domestic product - a measure of all the products and services produced in the United States - On an annualised basis, this number represents growth of 2.6%.

According to John Leer, chief economist at data analysis firm Morning Consult, "that's pretty respectable, somewhat over average for the U.S. economy, a developed economy."

From a decrease in both Q1 and Q2, such GDP expansion represents a recovery. The conventional definition of a recession is two consecutive quarters of negative growth.

"Consider the most likely worst-case situation; how would you finance it?" Allan Roth, a Colorado Springs-based certified financial advisor and certified public accountant, made the statement.

This year, consumer price growth has been roughly the fastest in four decades, putting strain on household finances.

Paul Ashworth, chief U.S. economist at Capital Economics, stated that "export growth will soon fade and domestic demand is becoming crushed under the weight of increased interest rates."

To stop inflation, the Federal Reserve has aggressively increased borrowing costs. Is this is great move? - "In the first part of next year, we anticipate a moderate contraction in the economy."

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