This recession declaration was shocking because it came so early.
But a recession is typically a period of at least six months of economic decline.
How long will this recession last?
It probably doesnt surprise you to learn that its too early to tell.
The recession ends when the economy stops declining, when it reaches its lowest point and starts to rebuild.
Heres a visual to help you picture how the recession determination is evaluated.
The important thing is that you could see the peaks and troughs that the NBER pays attention to.
you might see that the industrial production index peaked in 2008, then cratered pretty fast.
As soon as that line started to come down from the high point, the recession watch began.
Once that decline hits its lowest point, the trough, the recession is declared over.
(That gray shaded portion is the Great Recession.)
OK, so thats the situation.
So what can you do about it?
How can you protect your money during this time of economic contraction?
Guess what: Youre already doing it.
If youprioritized paying down debtany time in the last year, youre doing it.
If youtightened your budgetwhen the pandemic started to impact jobs in the U.S.,youre doing it.
If you lost your job and started making calls to negotiate your bills, youre doing it.
So keep your guard up.
Celebrate when you’ve got the option to.
