The Next Recession and Taking Advantage of the Rebound
Getting into and out of a Recession is no easy feat.
On this episode of the Financial Griot podcast, the team discusses how we got to this point in which recession fears are looming and also what you can do pre-, during- and post-recession to thrive. Millionaires are made during recessions. Learn how to position yourself to win.
In the show notes, we dive into the details of the essentials that you need to know to get prepared and stay prepared. This is going to be challenging. As always, we will make it through.
Table of Contents
An Unequal COVID Recession
This has to be the most discussed recession of our lifetime. While experts have been dishing out opinions left and right; they are generally in agreement that we might have already been in the recession since the 2nd quarter of 2022.
How do you know?
You might have felt it at the pump before the Biden administration tapped into our strategic reserves. It’s clear and evident when purchasing groceries.
As of late 2022, you also notice tech companies move toward laying off up to 10 percent of their staff.
The signs are all there.
However, this is different from the housing crisis of 2008. You won’t see soup lines but you will hear about American debt skyrocketing while savings plummet.
This is the unequal recession. And this will be costly for millennials and Gen-Z. When the dust settles, the wealth gap would have increased 10 folds. As of 2021, it was reported that rich Americans became 40 percent richer while the bottom 20 percent were all but wiped out.
A Future Beyond a Recession
Beyond the macro or microeconomics, Americans lost their optimism.
This will be the greatest challenge moving forward. More and more Americans aged 40 and below are opting out of the workforce in its entirety.
With inflation continuing to soar in the US, the Federal Reserve has moved aggressively to combat high prices by hiking interest rates. The central bank raised the rates by 0.75 percentage points — the fourth consecutive time it did so at that scale — and it remains on course with Fed Chair Jerome Powell’s message that the economy will need to experience “some pain” to get inflation under control.
In November 2022, Lyft laid off 13 percent of its workers. Kelly Chang was shocked to find herself among the 700 people who lost their jobs at the San Francisco company. “It seemed like tech companies had so much opportunity,” said Ms. Chang, 26.
“If you got a job, you made it. It was a sustainable path.”
Unfortunately, 2023 kicked off with job cuts and more of the same. Microsoft cut 10,000 jobs, roughly 5 percent of its workforce. Followed by Google cutting 12,000 positions, or about 6 percent of its total.
Their cuts followed big layoffs at other tech companies like Meta, Amazon, and Salesforce. 1,035 companies fired 158,951 tech employees in 2022, according to Layoffs. So far in 2023, 173 companies have offloaded 56,570 employees.
Nursing our Collective Depression
A 2011 study, Depression Babies which analyzed the Federal Reserve’s Survey of Consumer Finances from 1960 to 2007, found that people who came of age in the 1970s, when the stock market stagnated, were reluctant to invest in the early 1980s when it roared.
“Once you experience your first crash, things change,” Professor Nagel said. “You realize bad stuff happens and maybe you should be a bit more cautious.”
The next best thing is leadership and a great financial plan to sustain yourself through this downward economic spiral.
Connect with us on social media where we don’t always talk about a recession:
- Alainta Alcin – Blogger, Travel and Money Enthusiast @alainta_alcin
- Lovely Merdelus – Entrepreneur and Small Business Growth Specialist @lovelymerdelus
- Lawrence Delva-Gonzalez – Federal Auditor, Blogger, and Tax Specialist
- @theneighborhoodfinanceguy
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