Are we in a recession? It depends on who you ask. Recession news can be complicated, especially in 2022.
The most common definition of a recession is two consecutive quarters of negative growth. The economy met that bar after the most recent report on gross domestic product (GDP), which showed the economy shrank in the first half of 2022.
Still, we won’t know whether we’re actually in a recession for several more months. Why? The official arbiter of recessions is the National Bureau of Economic Research (NBER), and its recession criteria depends on more data than GDP. To formally declare a recession, the NBER looks for a significant and widespread decline in economic activity that goes on for a while.
2022 Recession News
We may very well be in a recession. However, a mixed bag of positive and negative economic factors makes it weird and hazy.
On the positive side: The labor market remains strong, still creating plenty of new jobs. Consumer and business investment also is looking sturdy.
On the negative side: Inflation is obviously on everyone’s radar, as is the Fed’s latest interest rate hike.
Whether we’re officially in a recession or not, the economy is flashing some undeniable warning signs. Despite recent gains, we can expect more market volatility. That’s the cyclical nature of the economy and investment markets. Ups and downs are normal.
The best thing we can do is have faith in our proven investment strategy, stick to our written financial plans, and ride out the current storm.