You may have noticed that the economy after the pandemic has been volatile. And while there has been talk of a possible recession for a few years, we have yet to enter a traditional recession. A recession is defined as a consistent, widespread downturn in the economy. And although there have been major market downturns recently, there have also been areas of stability.
Instead of qualifying our current economic situation as a recession, experts have been using the term “rolling recession.” The term means that instead of a widespread decline in economic activity affecting the entire country, certain industries or regions experience a downturn while others continue to grow.
For example, a rolling recession might occur if California experiences a decline in the tech and housing market while Florida experiences growth in the energy sector. The decline in the housing market would cause a contraction in economic activity in California, while the growth in the energy sector in Florida would help support overall economic growth in the country.
Currently, certain economic indicators look strong: inflation looks like it might slow down and the Gross Domestic Product is greater than expected. But other areas have slowed down or see downturns. Consumers still feel the effects of the sudden increase in inflation, and you may have noticed inflation making its way into your life. And industries such as housing and manufacturing continue their woes.
In general, experts recommend caution when handling your finances in times like these. Rolling recessions are difficult to track, and there is uncertainty about if a rolling recession will turn into a widespread recession. So, careful spending and careful saving are likely going to be good strategies until the country reaches solid economic ground.
Understanding the connection between a rolling recession and your investing and saving strategy can be key to the financial health of your retirement. If you have questions about your financial picture, Contact us at (603) 261-3736 to get started with a financial professional.
Sources:
- https://www.forbes.com/sites/qai/2023/02/14/what-is-a-rolling-recession/?sh=57898b0f535f
- https://www.investopedia.com/terms/r/recession.asp
- https://www.cnbc.com/2023/01/27/what-is-a-rolling-recession-and-are-we-in-one-experts-explain.html
- https://www.weforum.org/agenda/2023/03/what-is-a-rolling-recession-economy-news/
Bob has a passion for making your money work hard for you. He takes profound joy in ironing out a plan for a long and comfortable retirement, no matter what your current income or level of wealth. With a work ethic second to none, he has a zeal for transforming uncertainty into stable ways for you to protect your future and your family. He knows that the quality of your life you enjoy today can remain as rewarding—or even better—after retirement.
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