Will there be a recession in 2023?

Question

I keep reading mixed reviews on how deep the recession may be next year. This morning the WSJ speculated the US may not have one at all. Any thoughts?

Luke Stewart · Answer

To be factual to definitions, we are in a recession right now.. period. A recession by definition is 2 consecutive quarters of negative GDP, which we had first and second quarter. Just because the government tries to say we aren't in a recession by "changing" the definition, it doesn't change the data. The numbers never lie. So that being said, YES this is a recession, whether its a long one or a short one, a bad one or a light one, we must wait and see. But with mass layoffs at huge companies poping up every week, the fed continuing to raise rates and forecasting more rate raises, and the potential for a large number of people being overleveraged in debt... I would say things have to get worse before they get better. Build your nest egg, be ready for a good deal!

Caroline Gerardo · Answer

We are already in it. Get your ducks lined up.

Scott E. · Answer

Nobody knows. But fear gets clicks so most outlets like reporting on the more negative perspectives.

I'm not paying too much attention to whether or not we are in a recession. Instead I'm watching interest rates, inflation, housing inventory, average days on market, % of deals falling out of contract, etc. These metrics carry weight.

Lindsay Davis · Answer

Hi @Amy Raye Rogers,

Good question—I’d like to know too! Unfortunately, it’s very hard to predict when a recession will hit. And if we’re already in one, its magnitude or duration is likewise difficult to ascertain.

For these reasons, I’d stay away from making investment decisions based on whether or not there’ll be a recession in 2023. Macroeconomic forecasting is a notoriously complex task, and timing the market may not lead to the best outcomes.

Instead of trying to predict interest rates, business cycles, or upcoming recessions, stay the course and continue to carry out your current investment strategy. Stress-test your portfolio to ensure that you can weather the storm, but don’t make drastic changes that deviate too far from your long-term objectives.

At the end of the day, keep in mind that recessions are short-term events. Since 1945, the average recession lasted just 10 months, so hopefully that fact can bring a bit of comfort.

Juan David Maldonado · Answer

I personally do not think it will be bad compared to 2008 because 2008 was a different monster thanks to the financial/banking system at that time. I'm going to repeat what was told to me in my post about what I should be doing/recession. Stock pile your money and network like crazy.

Tommy Parker · Answer

Ehhh don't know to be honest. There is a lot of talk about it happening but not certain. I'm looking out for interest rates and inflation.

Bob S. · Answer

Well now that we have the house its likely no. The media LOVES to spread fear "if it bleeds it reads "

Plan for the worst , hope for the best

Rick Albert · Answer

It's such a weird thing because people are preparing for it and if they prepare well enough then there may not be an impact at all. Conversely, because of the fear, we may head into a recession as people stockpile money rather than spend it (making this an unsuccessful holiday season for retail).

My best guess is we are going into a recession because we are forcing ourselves into it. With that said, now is a great time to buy because regardless of what happens, people need a roof over their head. As interest rates rise, that means well qualified would be buyers are now tenants.

Eliott Elias · Answer

Whatever happens, be ready to buy the best deals of your life

Will there be a recession in 2023?

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