Get your complimentary guide to go with this episode:
Recession and Retirement Guide (GRA BLOG)
By submitting your contact information, you consent to be contacted regarding retirement income strategies that utilize investments and insurance products.
Below is a transcription of the Ask Gregory Podcast 94: Is the US Economy on the Verge of a Recession?
Gregory Ricks 00:00
Hey, welcome. I’m your host Gregory Ricks a financial advisor here to answer your questions and help you win with your money.
Podcast Intro / Outro 00:10
On today’s episode of the Ask Gregory Podcast, we have Dwayne Stein joining us from Mortgage Gumbo, and today he’ll be discussing with Gregory the impacts of a possible recession and what that can say for our economy. Also, we have a couple of battery downloads waiting for you on this topic. If you go to gregoryricks.com/podcast94 Again, that is gregoryricks.com/podcast94
Gregory Ricks 00:33
You know where are we own a recession, kind of some outlook some some takes from first trust that they were noting into the second half of the year. And that’s their article and we’ll read from it a little bit as we head into the second half of 2022. The latest hot topic appears to be whether or not the US economy is on the cusp of a recession. Real GDP growth did come in at an annualized negative 1.6% In the first quarter of this year. According to data from the Bureau of Economic Analysis, the technical definition of a recession is two consecutive quarters of negative GDP growth. opinions on this topic vary. Some pundits believe the US economy is already in recession. Brian Westbury, Chief Economist of first trust is not one of those was berry notes that the official arbiter of recessions the National Bureau of Economic Research considers other factors beyond just the real GDP, including job market, manufacturing activity and real incomes subject to change. wesbury does not currently foresee a recession arriving until late 2023 or 2020. For inflation, the war between Russia and Ukraine and supply chain problems continue to dominate the headlines, as well as the next hurdle could be mid term elections on November eighth. Dwayne Stein, welcome to the show, and host of moral gumbo also, hey, I’m doing really good this morning. How about yourself, man?
Dwayne Stein 02:33
Man? Look, it’s it’s been absolutely a little crazy. I know you’re hearing about it and everything that’s going on right now. So you know where we’re staying. I feel like I’m getting into your realm, Gregory in the financial side. Because, you know, on my show, I think it’s so important. And you taught me this is just making sure that you get information out to folks that that’s what’s important, whether it’s good or bad, it is what it is right. And you know, I can remember when all those security changes happened years ago. I mean, you are on the forefront of that. And that’s kind of where we’re at right now. What I’m trying to help people understand is, where are you getting your information from? Because the inflation is real. I hope to gosh, the guy that you just named, that said, the recession, he’s looking at 2023, the end of 2023 early, I hope he’s really wrong. I hope unfortunately, that it’s here a lot sooner, right. So we can sort of get on the back end of these things. Because if people think it’s it’s bad now, we still, in my opinion, have not even come close to peaking when it comes to these inflation numbers. And so it’s something that we’re keeping an eye on. And what I’m asking folks is, where are you getting your information from? Or are you just kind of moseying along, going, hey, we’ll see how this works. And figure it out from there. Where are you getting your info from? That is the key right now.
Gregory Ricks 04:08
You know, we saw consumer spending is increased by 1% in data that I was reading this morning, as well. And so that’s kind of surprising. It’s it’s actually people aren’t letting this inflation stop them in spending might have been increasing more. So it’s been a while back Psalm. But I, I think what scaling are, that’s the slow way. And what are you seeing from the housing side? Because I will tell you, I’ve said this, and I’m not changing it. But I’m gonna dig into some more of first trust data and other data that I’m getting but you know, as we get closer, maybe we get an idea but I feel like energy prices have caused enough for us to hit into a recession has caused enough slowdown, but there could be you know, just like wesbury said, there’s some other things that are offsetting, and I would rather get through that adjustment sooner than later, we’re just going to keep this fear going is relative, oh, now the recession is coming. And then you know, the market would drop 234 percent in the week, and then a stock, okay, it’s not, then it comes back. So there’s so much fear that the news is causing, and I’m kinda like, I think next year could be a better here, not a worse year, I think the impact of the elections on November 8, can is going to be one of two things is going to kind of like, Oh, my God, this didn’t go well. And that can be somebody’s take on it. And that way, well, so much for 2023 getting better, or is kind of like finally, we’re we hope to see some improvement. But But that’s kind of a an estimate, because we’re we’re still a long ways away from that. And to see the outcome of that. And in one judgment, was Barry’s kind of saying, Yeah, we’re not seeing improvement. Next year, is what he’s saying and improvements coming. Another two years, two and a half years out. That’s kind of what he’s saying there. And I’m not liking that.
Dwayne Stein 06:39
No, not at all, especially when gasoline Greggory it year over year. And you’ve seen these numbers, gasoline, 60%, higher than it was last year, at this time, energy, like you talked about 42%. In just one month, gas went up 11%. And energy seven and a half percent Gregory. I mean, that is nobody. And it’s funny, because I’m sort of going back to the basics. And I’m putting together a personal budget, right, and I’m going to share what I put together for myself, because I haven’t had to do this and gosh, knows how long. And now it’s like, you know what, I gotta get a budget together. And it goes with what you just said, with retail spending, how many people are cutting back, everybody still just rockin and rollin throwing up that credit card going from there. And people don’t understand the federal funds rate. They don’t understand what it is. And, you know, everybody I speak to is like, hey, well, before the Fed speaks, I want to get a mortgage and it no matter eight years, I’ve been talking about it throw in a couple years of doing your show. It’s over 10 years of trying to explain and people just don’t understand, but they keep throwing up that credit card. And that’s where you retail spendings up, how many people are not getting their nails done? How many people have stopped eating out how many people cancelled those streams? Right? Not many yet. So that’s why when I say the pain isn’t there yet, nobody’s eaten Viana sausage, or potted meat and sandwiches yet, you know what I mean? So, or ramen noodles, which aren’t even 10 for $1 anymore? You know? So, you know, that’s my concern when we’re looking at this. And again, not trying to scare folks. But you know, when people talk Oh, well, you know, you hear Gregory people within the housing market, oh, well, they’re going to have to pull back, they’re going to have to lower mortgage rates to try No way, especially with this data coming up. And if they haven’t peaked, there’s no way they’re pulling back on federal funds rate or anything to do with. I mean, you see what the 10 year Treasury is doing? It’s rising.
Gregory Ricks 08:46
Yeah, you know, I like that. Getting into a good spot with that. The other fear is the Fed, increasing their basis 1% Going forward, I bet I think that’s that was the fear earlier in the week and impacted the markets but I I think that might be dialed back a little bit. But one of the things I was just looking at is impact of all products. When we we talk about why I say that. There’s how many products are made from petroleum about 6000 Everyday more than 6000 everyday products get their start from oil including dishwashing liquid, solar panels, food preservatives, eyeglasses, DVDs, children, toys, tires, heart valves, that that’s just to name a few. So with oil being double, gosh, that’s impacting so many things in day to day life. And I think that’s what we’re this continues forward. But for that to get better. I do think it’s going to be a couple years out because policy changes what’s going to impact that?
Podcast Intro / Outro 10:04
Thanks so much for listening to ask Gregory where we answer your financial questions. You can find us anywhere podcasts can be found and on YouTube and Facebook Live every Saturday from 10 to 1! Subscribe, leave a review, and tune in next time! And don’t forget we’ve got a complementary download waiting for you on this topic if you go to gregoryricks.com/podcast94. Again, that is gregoryricks.com/podcast94
Gregory Ricks & Associates is an independent financial services firm that utilizes a variety of investment and insurance products. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Gregory Ricks & Associates are not affiliated companies. Gregory Ricks & Associates, The Total Wealth Authority is our trademarked tagline, it does not promise or guarantee investment results or preservation of principal nor does it represent a certain level of skill. Investing involves risk, including the potential loss of principal. Any references to protection, safety or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the issuing carrier. This radio show is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. Gregory Ricks & Associates is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Gregory Ricks & Associates. Any media logos and/or trademarks contained herein are the property of their respective owners and no endorsement by those owners of Gregory Ricks & Associates is stated or implied Gregory Ricks & Associates has a strategic partnership with tax professionals and attorneys who can provide tax and/or legal advice. AEWM, Gregory Ricks & Associates, WJ Blanchard Law, LLC, J Heath & Co. and Mortgage Gumbo are not affiliated companies. This show is a paid placement.