As layoffs continue and banking crisis … recession looms… what ‎possible scenarios?!‎

Amidst a barrage of headlines about layoffs and bank unrest, fears are growing of a coming recession. Questions arise about the continuation of the downturn

A recent report by “CNBC” indicates that if we look at the historical background regarding the length of previous economic recessions, it may give some indications.

Short term recession

A recession is defined as a significant decline in economic activity across various sectors that lasts for several months or more, as the National Bureau of Economic Research, an institution for the work of economic studies and research located in the United States, says that most recessions are short, citing examples and previous events, in a year 2021, the committee confirmed that the recession left by the pandemic lasted only two months, from February 2020 to April 2020, “making it the shortest US recession ever.” And this economic depression was ended through massive stimulus from the government.

However, the coming slowdown may not end so quickly. Fed economists expect there will be a mild recession later this year, “with a recovery over the next two years,” according to the Fed’s March 21-22 meeting minutes.

Experts say that because economists blame the impending economic troubles on recent turmoil in the banking industry, they expect the pain to last longer than usual: noting that “historic recessions related to financial market problems tend to be more severe and persistent than Normal recessions

In fact, the longest recession in recent decades was the 2008 financial crisis, which lasted for 18 months.

For his part, Preston Caldwell, chief US economist at Morningstar, a global financial services company headquartered in Chicago, said that another difficult aspect of the current economic conditions is that the Federal Reserve is deliberately trying to slow economic growth in hopes of controlling inflation. Lower interest rates usually help the economy recover from deflation, however, Caldwell expects the central bank to be able to tame inflation by the end of this year, and to be able to start cutting interest rates in 2024, at which point the economy will start in recovery.

Prepare for contraction:

If you’re worried about a recession and potential job losses, Kathy Curtis, founder and CEO of Curtis Financial Planning in Oakland, California, recommends updating your resume so you’re as prepared as possible to look for a new job should you need to. .

Staying connected to a network of people in your field can also help you learn about open positions or even land opportunities, Curtis, who is a member of the Financial Advisory Board, told CNBC. Experts say having a solid emergency savings account is one of the best safeguards to help weather the downturn without having to go into debt.