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Tag: Economic uncertainty

  • Retailers delay holiday hiring amid tariffs, slowdown | Long Island Business News

    In Brief:
    • Retailers are delaying or reducing seasonal hiring due to tariffs and economic uncertainty.
    • Analysts predict holiday job gains may fall to the lowest level since 2009.
    • Major chains like Bath & Body Works and Radial are scaling back seasonal hires.
    • Experts forecast smaller holiday spending growth compared to last year.

    Uncertainty over the economy and tariffs is forcing retailers to pull back or delay plans to hire seasonal workers who pack orders at distribution centers, serve shoppers at stores and build holiday displays during the most important selling season of the year.

    American Christmas LLC, which creates elaborate holiday installations for commercial properties such as New York’s Rockefeller Center and Radio City Music Hall, plans to hire 220 temporary workers and is ramping up recruitment nearly two months later than usual, CEO Dan Casterella said. Last year, it took on 300 people during its busy period.

    The main reason? The company wants to offset its tariff bill, which Casterella expects to be as big as $1.5 million this year, more than double last year’s $600,000.

    “The issue is if you overstaff and then you underperform, it’s too late,” Casterella said. ”I think everyone’s more mindful now than ever. ”

    Holiday hiring could fall to 2009 levels

    Online behemoth Amazon Inc. said Monday it intends to hire 250,000 full-, part-time and seasonal workers for the crucial shopping period, the same level as a year ago.

    But job placement firm Challenger, Gray & Christmas forecasts overall holiday hiring for the last three months of the year will likely fall under 500,000 positions. That’s fewer than last year’s 543,000 level and also marks the smallest seasonal gain in 16 years when retailers hired 495,800 temporary workers, the firm said.

    Among other companies cutting holiday payrolls: Radial, an e-commerce company that powers deliveries for roughly 120 companies like Lands’ End and Cole Haan and operates 20 fulfillment sites. It plans to hire 6,500 workers, fewer than last year’s 7,000, and is waiting to the last minute to ramp up hiring for some of its clients, chief human resources officer Sabrina Wnorowski, said.

    Bath & Body Works, based in Reynoldsburg, Ohio, said it plans to hire 32,000 workers, below the 32,700 a year ago.

    “We saw real strong signals that there’s been a cooling in the labor market, even beyond what our expectations were in the first nine months of the year,” Challenger’s senior vice president Andy Challenger said.

    Challenger also noted companies are using artificial intelligence bots to replace some workers, particularly those working in call centers. And he’s also seeing companies hiring workers closer to when they need them.

    Meanwhile, the list of companies staying mum about their specific holiday hiring goals keeps growing. Target Corp., UPS and Macy’s are declining to offer figures, a departure from years past.

    Holiday hiring: the first clues to what’s in store for spending

    Retailers’ hiring plans mark the first clues to what’s in store for the U.S. holiday shopping season and come as the U.S. job market has lost momentum this year, partly because Trump’s trade wars have created uncertainty that’s paralyzing managers trying to make hiring decisions.

    The Labor Department reported in early September that U.S. employers — companies, government agencies and nonprofits — added just 22,000 jobs in August, down from 79,000 in July and well below the 80,000 that economists had expected.

    The government shutdown, which started Oct. 1 and has delayed the release of economic reports, could worsen the job picture.

    In an attempt to exert more pressure on Democratic lawmakers as the government shutdown continues, the White House budget office said Friday mass firings of federal workers have started.

    Analysts will be closely monitoring the shutdown’s impact on spending. For now, many retailers say that consumers, while resilient, are selective. Analysts will also be watching how shoppers will react to price increases as a result of high tariff costs in the next few months, experts said.

    Given an economic slowdown, holiday spending growth is expected to be smaller than a year ago, according to several forecasts.

    Mastercard SpendingPulse, which tracks spending across all payment methods including cash, predicts that holiday sales will be up 3.6% from Nov. 1 through Dec. 24. That compares with a 4.1% increase last year.

    Deloitte Services LP forecasts holiday retail sales to be up between 2.9% to 3.4% from Nov. 1 through Jan. 31. That’s compares with 4.2% last year.

    And Adobe expects U.S. online sales to hit $253.4 billion from Nov. 1 to Dec. 31, representing a 5.3% growth. That’s smaller than last year’s 8.7% growth.

    A more flexible approach

    Companies are increasingly wanting to hire workers closer to when they need them, experts said.

    “In today’s environment, brands are really looking for us to be agile,” Radial’s Wnorowski said.

    So for some of its clients, Radial will now be hiring two weeks before Thanksgiving weekend, the traditional start for the season, instead of four weeks before the kickoff. Radial is also training holiday hires faster with new technology that’s simplifying their tasks. It used to take a couple of days to train a worker, but now it only takes a couple of hours, she said.

    Meanwhile, Target will offer current workers additional hours and then will tap into a separate pool of workers— 43,000— who pick up shifts. The Minneapolis-based company also hires seasonal workers across its nearly 2,000 stores and more than 60 distribution facilities to meet demand, it said.

    For the past few years, Walmart, the largest private employer, has been offering its workers extra hours available during the holidays, a Walmart spokesperson said, noting it’s worked well and the feedback from customers and workers has been “overwhelmingly positive.”

    The Bentonville, Arkansas-based retailer said there may be some seasonal hiring on a store-by-store basis, but most locations will dole out those hours to current workers.

    Economic data blackout could create challenges

    Waiting until the last minute to hire could mean a mad scramble to find talent, but companies say that with the slowing economy, they don’t anticipate having a hard time.

    Meanwhile, the temporary halt of the release of economic reports leaves retailers in the dark about sales forecasts and the workers they may need.

    “Certainly, for our customers not having access to data will put more of a challenge on their ability to forecast,” Wnorowski of Radial said. “But we’ll stay very close to them as we go into peak and we’ll adjust as soon we see things changing.”


    The Associated Press

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  • Federal government shutdown delays jobs report release, adding economic uncertainty

    The jobs report, which usually comes out on the first Friday of every month, will not be released today. Two private surveys that came out this week show *** wide range of numbers. The payroll provider ADP issued its monthly employment data, which does not include government agencies, showing the economy lost 32,000 jobs in September, while another survey by FactSet suggests 50,000 jobs were created at an already uncertain time in the economy. This is making things even more unclear. If the official government jobs report is delayed for several weeks, it could create *** Challenge for the Federal Reserve as they decide to change key interest rates which impact mortgages, loans, and credit cards. We’ve seen jobs reports delayed before during other government shutdowns in 2013 and 1995, the release of the jobs report was paused, but during the longest government shutdown in US history from 2018 to 2019, the jobs report was released, and that was during President Trump’s first term in office at the White House. I’m Rachel Herzheimer.

    Federal government shutdown delays jobs report release, adding economic uncertainty

    The ongoing federal government shutdown postponed the release of the monthly jobs report, adding to economic uncertainty.

    Updated: 4:35 AM PDT Oct 3, 2025

    Editorial Standards ⓘ

    The federal government shutdown has reached its third day, with senators preparing to vote again on short-term budget proposals from both parties, which have failed multiple times.Bipartisan talks continue, but Republicans remain firm in their demand that the government reopen before addressing Democratic health care demands, which include extending credits for cheaper private health care and reversing Medicaid cuts. The jobs report, usually released on the first Friday of every month, will not be published today due to the shutdown. Two private surveys released this week show differing data: payroll provider ADP reported a loss of 32,000 jobs in September, while FactSet suggested 50,000 jobs were created.The delayed report adds to the uncertainty in an already unclear economic situation and could pose a challenge to the Federal Reserve in deciding interest rate changes, which impact mortgages, loans, and credit cards.Previous shutdowns in 2013 and 1995 also saw delays in jobs reports, although the report was released during the longest shutdown in U.S. history, under President Donald Trump’s first term.Keep watching for the latest from the Washington News Bureau:

    WASHINGTON —

    The federal government shutdown has reached its third day, with senators preparing to vote again on short-term budget proposals from both parties, which have failed multiple times.

    Bipartisan talks continue, but Republicans remain firm in their demand that the government reopen before addressing Democratic health care demands, which include extending credits for cheaper private health care and reversing Medicaid cuts.

    The jobs report, usually released on the first Friday of every month, will not be published today due to the shutdown.

    Two private surveys released this week show differing data: payroll provider ADP reported a loss of 32,000 jobs in September, while FactSet suggested 50,000 jobs were created.

    The delayed report adds to the uncertainty in an already unclear economic situation and could pose a challenge to the Federal Reserve in deciding interest rate changes, which impact mortgages, loans, and credit cards.

    Previous shutdowns in 2013 and 1995 also saw delays in jobs reports, although the report was released during the longest shutdown in U.S. history, under President Donald Trump’s first term.

    Keep watching for the latest from the Washington News Bureau:


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  • How the government shutdown disrupts critical economic data

    The government shutdown that began Wednesday will deprive policymakers and investors of economic data vital to their decision-making at a time of unusual uncertainty about the direction of the U.S. economy.The absence will be felt almost immediately, as the government’s monthly jobs report scheduled for release Friday will likely be delayed. A weekly report on the number of Americans seeking unemployment benefits — a proxy for layoffs that is typically published on Thursdays — will also be postponed.If the shutdown is short-lived, it won’t be very disruptive. But if the release of economic data is delayed for several weeks or longer, it could pose challenges, particularly for the Federal Reserve. The Fed is grappling with where to set a key interest rate at a time of conflicting signals, with inflation running above its 2% target and hiring nearly ground to a halt, driving the unemployment rate higher in August.The Fed typically cuts this rate when unemployment rises, but raises it — or at least leaves it unchanged — when inflation is rising too quickly. It’s possible the Fed will have little new federal economic data to analyze by its next meeting on Oct. 28-29, when it is widely expected to reduce its rate again.“The job market had been a source of real strength in the economy but has been slowing down considerably the past few months,” said Michael Linden, senior policy fellow at the left-leaning Washington Center for Equitable Growth. “It would be very good to know if that slowdown was continuing, accelerating, or reversing.”The Fed cut its rate by a quarter-point earlier this month and signaled it was likely to do so twice more this year. Fed officials said they would keep a close eye on how inflation and unemployment evolve, but that depends on the data being available.A key inflation report is scheduled for Oct. 15 and the government’s monthly retail sales report is slated for release the next day.“We’re in a meeting-by-meeting situation, and we’re going to be looking at the data,” Fed Chair Jerome Powell said during a news conference earlier this month.The economic picture has recently gotten cloudier. Despite slower hiring, there are signs that overall economic growth may be picking up. Consumers have stepped up their shopping and the Federal Reserve Bank of Atlanta estimates the economy likely expanded at a healthy clip in the July-September quarter, after a large gain in the April-June period.A key question for the Fed is whether that growth can revive the job market, which this Friday’s report might have helped illustrate. Economists had forecast another month of weak hiring, with just 50,000 new positions added, according to a survey by FactSet. The unemployment rate was projected to stay at a still-low 4.3%.On Wall Street, investors obsess over the monthly jobs reports, typically issued the first Friday of every month. It’s a crucial indicator of the economy’s health and provides insights into how the Fed might adjust interest rates, which affects the cost of borrowing and influences how investors allocate their money.So far, investors don’t seem fazed by the shutdown. The broad S&P 500 stock index rose slightly Wednesday to an all-time high.Many businesses also rely on government data to gauge how the economy is faring. The Commerce Department’s monthly report on retail sales, for example, is a comprehensive look at the health of U.S. consumers and can influence whether companies make plans to expand or shrink their operations and workforces.For the time being, the Fed, economists, and investors will likely focus more on private data.On Wednesday, the payroll provider ADP issued its monthly employment data, which showed that businesses cut 32,000 jobs in September — a signal the economy is slowing. Still, ADP chief economist Nela Richardson said her firm’s report “was not intended to be a replacement” for government statistics.The ADP data does not capture what’s happening at government agencies, for example — an area of the economy that could be significantly affected by a lengthy shutdown.“Using a portfolio of private sector and government data gives you a better chance of capturing a very complicated economy in a complex world,” she said.The Fed will remain open no matter how long the shutdown lasts, because it funds itself from earnings on the government bonds and other securities it owns. It will continue to provide its monthly snapshots of industrial production, which includes mining, manufacturing, and utility output. The next industrial production report will be released Oct. 17.

    NEW YORK —

    The government shutdown that began Wednesday will deprive policymakers and investors of economic data vital to their decision-making at a time of unusual uncertainty about the direction of the U.S. economy.

    The absence will be felt almost immediately, as the government’s monthly jobs report scheduled for release Friday will likely be delayed. A weekly report on the number of Americans seeking unemployment benefits — a proxy for layoffs that is typically published on Thursdays — will also be postponed.

    If the shutdown is short-lived, it won’t be very disruptive. But if the release of economic data is delayed for several weeks or longer, it could pose challenges, particularly for the Federal Reserve. The Fed is grappling with where to set a key interest rate at a time of conflicting signals, with inflation running above its 2% target and hiring nearly ground to a halt, driving the unemployment rate higher in August.

    The Fed typically cuts this rate when unemployment rises, but raises it — or at least leaves it unchanged — when inflation is rising too quickly. It’s possible the Fed will have little new federal economic data to analyze by its next meeting on Oct. 28-29, when it is widely expected to reduce its rate again.

    “The job market had been a source of real strength in the economy but has been slowing down considerably the past few months,” said Michael Linden, senior policy fellow at the left-leaning Washington Center for Equitable Growth. “It would be very good to know if that slowdown was continuing, accelerating, or reversing.”

    The Fed cut its rate by a quarter-point earlier this month and signaled it was likely to do so twice more this year. Fed officials said they would keep a close eye on how inflation and unemployment evolve, but that depends on the data being available.

    A key inflation report is scheduled for Oct. 15 and the government’s monthly retail sales report is slated for release the next day.

    “We’re in a meeting-by-meeting situation, and we’re going to be looking at the data,” Fed Chair Jerome Powell said during a news conference earlier this month.

    The economic picture has recently gotten cloudier. Despite slower hiring, there are signs that overall economic growth may be picking up. Consumers have stepped up their shopping and the Federal Reserve Bank of Atlanta estimates the economy likely expanded at a healthy clip in the July-September quarter, after a large gain in the April-June period.

    A key question for the Fed is whether that growth can revive the job market, which this Friday’s report might have helped illustrate. Economists had forecast another month of weak hiring, with just 50,000 new positions added, according to a survey by FactSet. The unemployment rate was projected to stay at a still-low 4.3%.

    On Wall Street, investors obsess over the monthly jobs reports, typically issued the first Friday of every month. It’s a crucial indicator of the economy’s health and provides insights into how the Fed might adjust interest rates, which affects the cost of borrowing and influences how investors allocate their money.

    So far, investors don’t seem fazed by the shutdown. The broad S&P 500 stock index rose slightly Wednesday to an all-time high.

    Many businesses also rely on government data to gauge how the economy is faring. The Commerce Department’s monthly report on retail sales, for example, is a comprehensive look at the health of U.S. consumers and can influence whether companies make plans to expand or shrink their operations and workforces.

    For the time being, the Fed, economists, and investors will likely focus more on private data.

    On Wednesday, the payroll provider ADP issued its monthly employment data, which showed that businesses cut 32,000 jobs in September — a signal the economy is slowing. Still, ADP chief economist Nela Richardson said her firm’s report “was not intended to be a replacement” for government statistics.

    The ADP data does not capture what’s happening at government agencies, for example — an area of the economy that could be significantly affected by a lengthy shutdown.

    “Using a portfolio of private sector and government data gives you a better chance of capturing a very complicated economy in a complex world,” she said.

    The Fed will remain open no matter how long the shutdown lasts, because it funds itself from earnings on the government bonds and other securities it owns. It will continue to provide its monthly snapshots of industrial production, which includes mining, manufacturing, and utility output. The next industrial production report will be released Oct. 17.

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  • Samsung Profit Tumbles 35% as Chip Weakness Persists

    Samsung Profit Tumbles 35% as Chip Weakness Persists

    (Bloomberg) — Samsung Electronics Co. posted its sixth straight quarter of declining operating profit, reflecting weak consumer demand and stoking uncertainty over the timing of a broader tech recovery.

    Most Read from Bloomberg

    Korea’s largest company reported a 35% fall in operating income to 2.8 trillion won ($2.1 billion), about 24% shy of estimates. Revenue slid more than anticipated to 67 trillion won. For all of 2023, Samsung reported its slimmest operating profit in 15 years.

    The results underscore how demand for smartphones and the memory chips that power modern electronics remains sluggish given economic uncertainty. It also muddies the outlook for a market recovery that many investors had hoped would emerge in 2024. In December, rival Micron Technology Inc. delivered a better-than-projected revenue forecast that suggested datacenter construction may make up for lukewarm computing and mobile device markets.

    “This shows that the rebound is slower than we all thought,” said Tom Kang, research director at Counterpoint Technology Market Research. “Prices are not rising that fast and the demand from certain sectors is not that strong.”

    Samsung in October predicted the long-depressed $160 billion memory market will bounce back gradually in 2024, driven by a boom in AI development. Prices should start climbing out of troughs around the latter part of 2023, executives said at the time.

    The company’s shares fell 2.4% in Seoul on Tuesday. Its disappointing results stem partly from a low utilization rate in its foundry chipmaking business, said Sanjeev Rana, an analyst at CLSA Securities Korea Ltd.

    Read more on financial analysts’ reactions to Samsung’s preliminary results.

    The consumer electronics unit also took a hit from fierce competition and higher marketing costs, while profit from its smartphone business likely came in toward the lower end of analysts’ estimates, he said.

    But there are signs of recovery. South Korea’s semiconductor industry in November recorded the largest gains in years in both production and shipments. Given rising memory prices and improving demand, “it is likely that Samsung’s chip business will return to profitability within the first half of 2024,” Rana added.

    Investors will want to hear about Samsung’s longer-term investment plans, particularly in the field of AI, when executives preside over the release of its full results on Jan. 31.

    The company now aims to catch up with rival SK Hynix Inc. in the burgeoning field of high-density memory chips, where it plans to increase capacity by 2.5 times in 2024. HBM, an advanced chip that handles data more quickly, works with hardware such as Nvidia Corp.’s accelerators to speed up data processing for intensive tasks like training AI models. Hynix Chief Executive Officer Kwak Noh-Jung told reporters he expected AI demand to help double the Korean firm’s market value over three years.

    “Samsung may have to gain market share in AI chips to achieve solid profit growth in 2024,” Bloomberg Intelligence analysts Masahiro Wakasugi and Phu Pham wrote in a note after results.

    Samsung is also counting on a new lineup of devices and foldables to drive growth in 2024. The Korean company is preparing to unveil its latest gadgets in the US later this month, at a time investors worry Apple Inc.’s iPhone 15 may be running out of steam mere months after launch.

    –With assistance from Haidi Lun, Annabelle Droulers, Youkyung Lee and Mayumi Negishi.

    (Updates with stock trading in the fifth paragraph)

    Most Read from Bloomberg Businessweek

    ©2024 Bloomberg L.P.

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  • How to Identify a Good Investment (Even During Economic Uncertainty) | Entrepreneur

    How to Identify a Good Investment (Even During Economic Uncertainty) | Entrepreneur

    Opinions expressed by Entrepreneur contributors are their own.

    Rising inflation. Ongoing supply chain problems. International conflict.

    There’s a lot of volatility in the market today, which has many entrepreneurs and investors feeling stressed. With this much uncertainty, choosing how to allocate money and being confident in those choices can be challenging. Too often, people get trapped in analysis paralysis or needlessly lose sleep second-guessing themselves.

    One of the best ways to ease that stress is to take the emotion out of your decision-making. And the best way to take emotion out of the equation is to establish a clear set of investing criteria. By knowing precisely what a good investment looks like, you’ll be able to make wise decisions quickly, efficiently and confidently, no matter what else is happening in the world.

    Related: Why the Current Volatile Market is an Opportune Time for Impact Investing in Undercapitalized Entrepreneurs

    Step 1: Understand who you are and what you want

    Investing is not a one-size-fits-all process. An excellent opportunity for you may not be great for someone who doesn’t share your interests, risk profile and goals. This means establishing your investing criteria begins with introspection.

    Spend time answering the following questions:

    • What kind of lifestyle do you want your investments to fund? The answer to this question will help you begin to create accurate financial targets.
    • Are there certain types of assets you enjoy more than others? Some people love buying and managing real estate, while others prefer commodities or currency. Some people are deeply involved in a single business, while others enjoy the thrill of serial entrepreneurship.
    • How do you feel about using leverage? The extent to which you’re willing to use borrowed capital as a source of funding will impact the types of investments that make it onto your preferred list. Strategically using leverage can dramatically increase your opportunities to generate returns, but this technique isn’t a good fit for everyone.

    Step 2: Use the tax law to your advantage

    I always tell my clients: The tax law is a series of incentives. It is the government’s way of telling you what it wants you to do, and when you listen, the government is willing to invest with you. So, while there are a lot of investments that will increase your taxes as you earn more money, there are some excellent options that the government is so excited to have you make it is willing to reduce or even eliminate your taxes.

    How does this work? Governments around the world recognize their societies are better off when businesses and private citizens invest in things like creating jobs, building housing and growing food. So, they create tax incentives to promote these investments.

    I recently wrapped up an in-depth study of these incentives in the U.S. and 14 other countries and identified seven categories of investments that every government supports. The categories are:

    • Business
    • Technology, research and development
    • Real estate
    • Energy
    • Agriculture
    • Insurance
    • Retirement savings

    Which of these categories matches the criteria you established in step 1? Spend time learning more about what incentives the government offers to investors in the categories that interest you most. When you use these incentives, you’re putting yourself in a position to build wealth faster by decreasing the amount of money you’re paying in taxes.

    Choose the category that fits you best. Then, double down on your research. Ideally, you will become narrowly focused on a specific niche within your chosen category. The more you learn about a specific investment and the more focused you become, the more you will increase your expertise. The greater your expertise, the lower your risk.

    Related: 7 Best Types Of Investments In 2023

    Step 3: Make a checklist

    Now that you have clarified what you’re looking for in an investment and identified the tax-effective categories in which you’ll invest, you can finalize the specific criteria you’ll use for evaluating each option. Your goal is to create a detailed checklist that lets you quickly and confidently determine which investments suit you best. Once you have established this framework within your investing niche, you’ll be able to scale your investment process.

    Your list should include the prospective investments:

    • Target rate of return
    • Expected cash flow
    • Leverage requirements
    • Exit strategy
    • And, of course, tax repercussions

    Creating this framework isn’t a black-and-white task. Your goals, circumstances and values will determine what makes an investment a good fit for you.

    You absolutely can and should do this work with the support of your CPA and other financial advisors. They can help you navigate the technical requirements on the tax side and make more precise financial estimates. Having the right team in place, alongside a proven wealth and tax strategy, serves as extra protection from making poor choices in high-stress situations.

    At the end of the day, you’ll have the peace of mind that comes from knowing you are making investment decisions based on where you are in life, where you want to go and how you’d like to get there. Plus, when you build your investing strategy in connection with your tax strategy, you’ll be able to make more money, more quickly and pay fewer taxes at the same time.

    Tom Wheelwright

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  • 5 Keys to Managing a Reshuffled Hybrid Team After Layoffs | Entrepreneur

    5 Keys to Managing a Reshuffled Hybrid Team After Layoffs | Entrepreneur

    Opinions expressed by Entrepreneur contributors are their own.

    As a manager, leading a reshuffled hybrid team after layoffs can be a challenging task. The team dynamic has changed, and employees may be feeling uncertain, anxious or even resentful about the changes. This can affect their motivation and productivity, which can lead to decreased morale, lower job satisfaction and eventually, high turnover. It can be even more difficult when the layoffs happened in a less-than-empathetic manner, such as many prominent tech companies — Google, Twitter, Amazon, Meta, and others — recently laying off their employees by email.

    But with the right approach, managers can navigate this difficult situation and keep their teams motivated and productive. As an expert in hybrid workforce strategy, I helped team managers navigate through this stressful period, so as to minimize the natural decline of productivity, morale, and engagement that accompanies any layoff and team reshuffling.

    Gleb Tsipursky

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  • What Is a Recession and How Do You Prepare for One?

    What Is a Recession and How Do You Prepare for One?

    The news is abuzz with rumors of the next recession coming in 2023 or 2024. But for most Americans, all of that triggers a sudden panic and a desperate need to look at one’s bank account.

    What is a recession, what does it mean, and how can you prepare yourself and your family’s finances for one? This article will answer each of these questions and more. By the end, you’ll know what to expect and how to prepare for a recession.

    What is a recession?

    According to economists working for the National Bureau of Economic Research, a recession is a prolonged period of economic downturn or declining economic activity.

    It affects a nation’s or the world’s entire economy and lasts for a few months or more. In some ways, the best way to understand the recession is to compare it to “regular” or positive economic activity and GDP.

    GDP (gross domestic product) is essentially the combined value of the goods and services made by an economy, like the American economy. The country’s GDP grows a bit each day/week/month in a standard economy.

    When a recession kicks in, there is no economic expansion. Instead, the GDP is negative — the value of goods and services in the economy decreases — for more than two quarters or approximately six months. People stop spending as much money when this happens because the dollar’s value decreases.

    Related: Are We in a Recession? Here’s What Economists Say

    This decrease in consumer demand triggers a decline in industrial production, exacerbating the spiral effect and making a recession last longer. A significant decline in the business cycle, characterized by many consecutive quarters of lower consumer spending, may lead to job losses or a high unemployment rate.

    Several past recessions have stalled economic growth and led to the depletion of the Federal Reserve or the “Fed.”

    These include the recession leading into World War II, the Great Recession financial crisis, which occurred in 2008 from speculation on real estate, and the most recent recession brought on by the Covid-19 pandemic and the necessary cutback/slowdown on retail sales in the U.S. economy.

    Signs of a recession

    Aside from this recession indicator, some typical economic indicators also have other signs and symptoms to pay attention to.

    These signs include:

    • More layoffs than average, a tighter labor market.
    • A general, widespread decline in stock market stock prices.
    • More businesses are going bankrupt than usual.
    • Fewer raises or promotions for workers.

    Related: Are We Headed for a Recession? It’s Complicated.

    As for GDP? According to some sources, the American GDP was -1.6% in the first quarter of 2022 and -0.9% in the second quarter of 2022. Technically, this means there is currently a recession, regardless of what people say.

    Note that a recession differs from a depression, which is much more severe. In a depression, the economy tanks significantly, and many more people may lose their jobs and money.

    In contrast, a recession is usually relatively short-lived. Some people may not feel a recession’s impact, depending on how much money they have saved up and their financial situation before the recession occurs.

    In any case, a recession is never good news, which could signify that you must prepare accordingly.

    How to prepare for a recession

    Fortunately, there are multiple ways in which you can prepare for a recession. Good recession prep can keep your finances secure until the recession recedes, allowing you to maintain your investments, keep your savings account intact and provide your family with peace of mind.

    Knock out as much debt as possible (and avoid new debt)

    Your priority should be to get rid of as much debt in your name as possible. You should already be trying to clear debt aggressively. The longer you leave it hanging around, the worse your credit will be and the more interest fees you’ll pay over time — it’s lost funds.

    As you put more of your money toward knocking out your debt, prioritize high-interest debt, such as credit cards and loans with high-interest rates. When you get rid of as much debt as possible, you set yourself up for financial success during the potentially turbulent economic times ahead.

    Avoid taking out any unnecessary loans or opening up new credit accounts during this timeframe. If you avoid further debt, you’ll have more money to spend on savings or necessities, which may be necessary soon.

    Related: How to Recession-Proof Your Business

    Keep saving aggressively

    Speaking of saving, you should continue to save aggressively or even save more money than you were previously.

    You might not get an unexpected promotion or pay raise during the recession. Even worse, your job could be at risk if you recently joined a company or are at the beginning of your professional career.

    In these cases and others, your income streams could dry up unexpectedly. If you save aggressively before that happens, you’ll be well-positioned to get back on your feet and weather this economic storm until clear skies return.

    Try to save as aggressively as possible and put that money into a secure savings account. That way, you’ll earn interest on those savings and avoid accidentally spending the money.

    Diversify investments

    Plunging numbers and red lines on charts are not reasons to withdraw all of your investments or blow up your portfolio if you’re invested in the stock market. You should keep your money in the market; after all, the stock market will eventually rebound just like it always does.

    Instead of panicking, diversify your investments by distributing your money into different stocks, funds, and other securities and assets. When you diversify your portfolio further, you protect it from economic damage, even from recessions.

    Plus, if you diversify your investments instead of withdrawing from the market, you’ll prevent yourself from losing money in the short term.

    Every time a recession occurs, some Americans invested in the market sell all of their securities, which only lowers prices for those securities. Then they regret this panicked decision as the market inevitably rebounds, with many stocks achieving higher prices than they reached previously.

    Bottom line: keep your investments in the market and keep your eye on the prize, particularly for long-term gains. A recession will eventually pass. Your current positions may be unattainable the next time you have money to invest in the market.

    Related: Worried About a Recession? Do This to Prepare Your Company.

    Bump up your credit

    Your credit score is also essential during a recession. You should improve your credit score before and during a recession whenever possible, primarily by eliminating high-interest debt such as credit card debt.

    If necessary, move any high-interest debt to a new credit card with an introductory 0% APR offer for any balance transfer funds. This can be an excellent way to quickly pay down any other debt in your name (in keeping with the tip above) without paying extra interest.

    In any case, try to improve your credit so you can take out emergency loans if necessary, and so any other fees or financial strain you face over the next few months, reduce your credit by as little as possible. Many people feel the aftereffects of recessions for years to come, primarily because it damages their savings accounts or credit scores.

    Don’t panic

    Do not panic if and when a recession occurs or when the news anchors start talking about it. Contrary to what some may believe, recessions are standard parts of the economic cycles inherent in capitalism.

    Simply put, recessions are inevitable declines in economic activity that eventually fade away. Once people stop panicking about the effects of a recession, economic activity should return to normal, and businesses will start to boom again.

    Just thinking of a recession in this light — a regular element of the economy and not something to necessarily be feared — will help you keep your head straight as you plan.

    Not panicking is crucial, so you keep spending and saving money, which are essential actions to do your part to prevent the economy from spiraling downward even further.

    Summary

    Recessions might be financially uncomfortable, but they are far from devastating if you take the right steps beforehand. The proper prep and patience will go a long way toward shoring up your bank accounts and protecting your finances throughout the upcoming recession until the market upswings again.

    Looking to expand your financial knowledge with more articles like this one? Explore more of Entrepreneur’s Money & Finance articles here.

    Entrepreneur Staff

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