“Time and tide wait for none” and that’s what agenda the economic world follows. Well, as we are in the mid of 2018, the chances of economy falling is very small. We are living in a moderate economy era where Job growth is robust, consumption is healthy, employment is down, and inflation is low but steady. The economic extension can’t go forever and hence we are mentioning some points that how to prepare for next recession.
First Of All What Is A Recession?
Sometimes people don’t even understand what actually recession is and starts agitation about it unknowingly, so let’s define it. Basically, the decline in GDP results in recession and the consecutive two-quarters of it is considered as one.
The National Bureau of Economic Research defines the recession as:
“An appreciable decline in economic activity spread across the economy, lasting for more than a few months, normally which is visible in real GDP, real income, industrial production, employment and wholesale-retail sales. The recession begins as soon as the economy approached the top of the activity and takes an exit as soon as the economy reaches low. Between inclines and declines, the economy is in an expansion. This expansion showcases the real version of the economy.”
How To Prepare For Next Recession
- Keep Updating Your Resume – Be prepared for seeking new opportunities as not even a single job is recession proof. You never know when you will need to send your resume for a new job so keep it fresh even if you are not hunting any.
- Ensure Your Company’s Success – Being the owner of a firm you must ensure that each and every employee is vesting in the success of your company. Each and every counterpart must realize the value of work and must maintain their spirit to work passionately and wholeheartedly.
- Demolish Your Debts – This is the one thing which can relieve you in the recession time. If you will clear out your debts beforehand there will be no chances of any kind of depression due to the pressure of earning the bread and clearing the debts as well.
- Reinforce Your Emergency Funds – Start saving a particular amount of money per month in your savings bank account as they are easily accessible and feasible. Other than investments keep this amount as saving for any kind of emergent situation in the future.
- Order Your Investments – Develop an all complete financial plan that includes risk, taxes, spending and other sectors. Having a plan also helps keep some of the emotion out of both positive and negative market events it also helps to plan how your investment portfolio should be positioned.
- Be A Star At Your Workplace – See your position from the eyes of your boss that how he wants you to work and what actually he expects from you. Make your boss’s priorities as yours try to be passionate and enthusiastic at your work so he may never think about firing you out during the recession.
These points will help in getting the answer of how to prepare for next recession.
How Close We Are To Another Recession
It is important to know that how close we are to another recession. Since the Great Recession of 2007 to 2009, by many measures, we can say that the economy is in its best shape. By the end of the year, averaged wage growth might expand by 3 percentile. In the month of May, unemployment hit as low as 3.8 percentile in the last 18 years. For the second time since the downturn, the economy was projected to grow by nearly 3%.
Interest rates and inflation both are expected to jump up at the end of 2018 — this will, unfortunately, have a massive impact on a feasible recession in the economy.
But the rise in the interest rate will be a slight one and inflation too rises by the snail’s pace as per the Federal Reserve’s. This will make us know better than how to prepare for next recession.
Many economists are forecasting a recession as early as next year because this is the second longest economic expansion in U.S. history. Half the economists foresee a recession starting in late 2019 or in early 2020 and it always remains a question that how close we are to another recession, surveyed last month by the National Association of Business Economics, and two-thirds are prognosticating one by the denouement of 2020.