What goes up must come down.Įconomists use charts (and more charts and more charts) to identify patterns in economic cycles that may explain why recessions occur, why some are more severe than others, and when the next one might happen. The expansion then falters until it bottoms out in a recession.
Economic activity expands until it reaches a peak of performance. Smart planning can help you and your family get ready for the next recession, whether it occurs in now, in 2023, or further into the future. Since downturns happen cyclically, each presents an opportunity to learn and prepare for the next. The prospect of a recession, is no reason to panic. The longest, from 2007 to 2009, lasted 18 months. Since 1945, there have been 12 recessions in total. That downturn followed a record 128-month expansion that began in June 2009. The most recent recession occurred over a two-month period from February 2020 to April 2020. The National Bureau of Economic Research has tracked recessions in the U.S. Recessions normally don't happen every year, but they're not unusual. Recessions reduce opportunities: failed businesses, fewer jobs, and lower wages. Economic expansions create opportunities: new businesses, more jobs, and higher wages. Whatever you call it, a recession can impact your finances. Bureau of Economic Analysis defines a recession as "a marked slippage in economic activity." You can think of it as a downturn or contraction, or the opposite of an expansion. Does it all add up to a recession on the horizon? While no one knows for sure what to expect, understanding the normal ups and downs of economic cycles can empower you to plan ahead and take appropriate steps to ensure that you and your family will be financially ready for whatever the future holds.
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