Is the Economy in a Recession?
Well, do we EVER really know until we are in it for 2-3 quarters? No…we do not and “they” won’t call it a recession until we are boots deep! So, yes, I think we are. Here is why?
How much money was spent for the COVID relief fund? Was it over 9 trillion just in unemployment? Yes, I believe it was? And that is not including the government funds allocated elsewhere.
Allocations:
- Individual and families
- State and local aid
- Healthcare
- Businesses
- $288 billion on other…..
How much money did we send to Ukraine? The United States committed to $5.3 billion in security assistance; including, but not limited to just money.
Someone must pay that money back. You didn’t that money would be free did you? We just didn’t see how we would be paying it back.
Inflation: inflation is how we are paying this back.
What is the main cause of inflation?
- Increase in the money supply – we have that NAILED down!
- Worker shortages – has everyone noticed that everyone is hiring?
- Supply chain distribution – and man… we got this one too. We need workers! See above.
- Fossil fuel policies – and no, I am not even gonna go there.
- Rates
What will happen in a recession?
You will start to see a decline in economic activity that lasts more than a few months. Folks, we are in month 3.
- Prices will continue to rise on everything – which means people will budget and spend less.
- Workers will need jobs – this is good news. Employers cannot continue to fight wage increases and continuous employment opportunity.
- The supply chain is getting better as the ports are slowly opening up – this will cause in inflex in supply in the retail sector.
- Fuel – we know this…. We are paying for it. Fuel influences every sector of the economy. Good, bad or even ugly.
- Rates are on the rise, we all know this. The mortgage sector is laying off employees everywhere in response to refinances coming to a screeching halt around March.
Piatt’s 2 cents – Prepare | Budget | Educate Yourself | REPEAT
Consumer inflation isn’t stopping; in fact, it continues to gain momentum. Which I literally said this time last year! What is on the rise? Rents, fuel, cars, food, etc…. prepare for this to continue as inflation hit another ALL TIME high at 9.1% year over year. Which again, was the largest since 1981. (For like the 12th month in a row, or so) I can almost guarantee the Feds will raise their rates in response to this news.
To back up my point, here is what the National Association of Home Builders stated:
“The first half of 2022 marked a slowdown that will yield several quarters of weak growth and rising unemployment. This will ultimately lead to an “official” recession, although it will be mild compared to the Great Recession a decade ago.
Piatt’s 2 cents – Prepare | Budget | Execute | REPEAT
As I recall, from the 2008-ish disaster, that although housing market weakness can lead the economy into a downturn, housing is typically the first sector to rebound as markets recover. This will be helped by the fact that there remains a housing deficit in the United States. Supply has yet to meet demand.
And you still need to buckle down, work twice as hard and save! Start now.
Fight for Progress, not Perfection in this arena. Real estate is a long game with huge payoffs. And if you ever need my real estate two cents, I am always here to share my change. 😊
