{"id":12283,"date":"2023-02-15T19:45:49","date_gmt":"2023-02-15T19:45:49","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=12283"},"modified":"2023-02-15T19:45:49","modified_gmt":"2023-02-15T19:45:49","slug":"recession-or-not-mitch-offers-his-outlook","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/recession-or-not-mitch-offers-his-outlook\/","title":{"rendered":"Recession or Not? Mitch Offers His Outlook"},"content":{"rendered":"\n<p><em>Oscar L. from Lockhart, TX asks: <\/em>Hello Mitch, I\u2019m a bit confused by where the economy stands right now. Everyone says a recession is coming or we\u2019re in one, but then on the other hand the unemployment rate keeps going down. What\u2019s the real story here?<\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>Thanks for writing. I can assure you that even some of the top economists across the country are just as confused as you are about the actual state of the economy. Case-in-point: the research firm Refinitiv surveyed 81 economists for January 2023 job growth projections, and the consensus was that ~185,000 new jobs would be added.<sup>1<\/sup><\/p>\n\n\n\n<p>The actual number: 517,000!<\/p>\n\n\n\n<p>Federal Reserve Chairman Jerome Powell and other Fed governors were also taken aback by the news. The president of the Federal Reserve Bank of Minneapolis, Neel Kashkari, remarked that the jobs number \u201csurprised all of us\u201d and Fed Chairman Powell said that \u201cthis cycle is different from other cycles\u2026It has just confounded all sorts of attempts to predict.\u201d<\/p>\n\n\n\n<p><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/recession-is-coming-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_recession_is_coming_zim_02_13_2023&amp;content=recession_is_coming\">How to Prepare for a Recession<\/a><\/u><\/strong><\/p>\n\n\n\n<p>What will happen to your investments if a recession occurs? A recession can impact investors in many different ways, but with foresight and planning, you may be able to avoid some of the damage a recession can cause.<\/p>\n\n\n\n<p>To help you plan for what\u2019s ahead, we are offering our recession guide, to help you understand the following \u2013<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Recession signals and indicators<strong><em><\/em><\/strong><\/li>\n\n\n\n<li>How recessions work<strong><em><\/em><\/strong><\/li>\n\n\n\n<li>How long recessions last<strong><em><\/em><\/strong><\/li>\n\n\n\n<li>How to potentially protect yourself and your family from long-term damage<strong><em><\/em><\/strong><\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, get our free guide. You\u2019ll learn the scope and impact of recessions, and get our viewpoint on the most important moves you can make to weather a potential one. Don\u2019t wait\u2014get this guide today!<br>\u00a0<br><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/recession-is-coming-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_recession_is_coming_zim_02_13_2023&amp;content=recession_is_coming\">Download Your Copy Today:\u00a0<em>A Recession is Coming: 6 Insights to Know You\u2019re Prepared<\/em><\/a><\/u><\/strong><em><strong><a href=\"https:\/\/go.steadyinvestor.com\/recession-is-coming-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_recession_is_coming_zim_02_13_2023&amp;content=recession_is_coming\"><u><sup>2<\/sup><\/u><\/a><\/strong><\/em><\/p>\n\n\n\n<p>Aggressive rate hikes are meant to push up borrowing costs, slow investment and growth, and almost force companies to cut back on hiring and wage increases. The effects of higher rates have certainly been felt in areas like housing and in the technology sector where growth happened too quickly in the years following the pandemic. But elsewhere, the economy has remained more resilient than most expected, and companies are desperate to keep and hire workers. The unemployment rate has gone down during this financial tightening period, not up.<\/p>\n\n\n\n<p>The Fed is worried that too-little-slack in the labor market will eventually emerge as an inflation problem, but the signs to date suggest wage pressures are also getting better, not worse. For Q4, the Labor Department reported that employers spent 1% more on wages and benefits than they did in Q3, which was an improvement from the previous quarter\u2019s 1.2% pace.<sup>3<\/sup> On an annualized basis, wages and benefits grew by 4% in the fourth quarter, which is a marked improvement from the peak 5.8% pace set earlier in 2022. 4% wage growth is not compatible with the Fed\u2019s 2% average inflation target, but it is undeniable that the rate of growth is heading in the right direction.<\/p>\n\n\n\n<p>What does this all mean for the \u2018real story\u2019 in the economy? In my view, it\u2019s that a recession \u2013 if one were to occur \u2013 would be so mild that many people wouldn\u2019t even notice it. Traditional signs that a recession is looming \u2013 like the inverted yield curve, weak readings in manufacturing and industrial production, and the Conference Board\u2019s Leading Economic Index \u2013 all suggest that the economy is poised to slow. But it\u2019s also true that consumer spending makes up about two-thirds of total economic output, and as long as everyone who wants a job has one, I don\u2019t foresee a cliff in spending \u2013 which also means I don\u2019t foresee a deep recession.<\/p>\n\n\n\n<p>There is no way to know exactly when or if a recession will occur, but you can prepare for one.<\/p>\n\n\n\n<p>It\u2019s important to understand how recessions work, how long they last, and how to potentially protect yourself and your family from long-term damage to your assets and security. We can help you with our free guide,<strong><a href=\"https:\/\/go.steadyinvestor.com\/recession-is-coming-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_recession_is_coming_zim_02_13_2023&amp;content=recession_is_coming\"> <em>A Recession is Coming: 6 Insights to Know Now So You\u2019re Prepared<\/em><\/a><\/strong>.<sup>4<\/sup><\/p>\n\n\n\n<p>If you have $500,000 or more to invest, get our free guide today. You\u2019ll learn the scope and impact of recessions, and get our viewpoint on the most important moves you can make to weather this one. Don\u2019t wait\u2014get this guide today!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>While traditional indicators like the yield curve and Leading Economic Index signal recession, jobs remain strong. It&#8217;s a confusing economic time. <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-12283","post","type-post","status-publish","format-standard","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/12283","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=12283"}],"version-history":[{"count":2,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/12283\/revisions"}],"predecessor-version":[{"id":12285,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/12283\/revisions\/12285"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=12283"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=12283"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=12283"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}