Recession or growth scare? Your guide

By: Gerald Sparrow  President & Founder, Sparrow Capital Management, Inc.

I’m hearing a lot of mixed messages these days about the economy. Some headlines say we’re already in a recession; some say one is looming. Others hint that we’ll avoid a recession and have a soft landing. It makes you wonder who’s in charge of putting a label on the economy.

I did a little digging on the topic, and here’s what I found.

The National Bureau of Economic Research (NBER) is the official arbiter of recessions. A recession is a “significant decline in economic activity that is spread across the economy and lasts more than a few months.” You may be surprised that the NBER no longer defines back-to-back quarters of negative Gross Domestic Product growth as a recession–that’s considered old-school economics.

While the current economy includes inflation and rising interest rates, it’s also creating jobs. This economy created over half a million jobs in July alone. Given that indicator, I think it’s safe to say that our economy is expanding, not receding.

An old saying goes, “Don’t worry about the horse. Just load the wagon.” It’s a good time to stay focused on your goals and not worry too much about what you can’t change

PHOTO CREDIT: https://www.shutterstock.com/g/eamesBot

Via SHUTTERSTOCK

DISCLOSURE

Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit nor guarantee against a loss. 

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalized investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.