We’ve all heard the headlines and pessimistic consumer speculation on the impending recession coming in 2020. Well folks, hate to break it to ya, but everyone said the exact same thing about 2019 and here we are with 26 days left and no recession in sight. Of course, any number of things can change the tides of the economy, but I feel like there’s some room for a bit more optimism heading into 2020 and here’s why….
You may have already forgotten, but we had a lot more to worry about this time last year. Even though there’s still some concern about foreign trade and political instability today, it’s nowhere near the volatility that it was the same time last year. If you recall, last December we were in the midst of a historically long government shutdown that sent the economy into a temporary, albeit scary, tailspin. The bottom fell out of the stock market and the housing market came to a screeching halt. These were legit reasons to be waving the recession flag, yet the economy rebounded and 2019 was prosperous by many measures.
One of the key reasons why the economy didn’t ultimately end up in the toilet is due to some key decisions made by the Fed. You’ve heard of the Fed, maybe you’ve Googled the Fed, but you still have no idea what the heck the Fed does… amiright? I’m not even going to attempt to demystify this complex part of the government, but I’ll give you some key nuggets to mull around on…. Last year, people who were fearful of a recession speculated that the Fed wouldn’t react quickly enough to help alleviate a slowing economy and thus push us further into recession. The Fed said, hold up, wait a minute, we got your back and initiated a mid-year adjustment to lower interest rates. This translated into lower mortgage rates which meant buyers could afford more and owners can save some cash by refinancing. Hooray for all!
There are definitely some areas of concern nationally, think tariffs and their projected impact to US manufacturing, but overall the key metrics continue to be strong. Unemployment is at a 50 year low. Job growth is steady. Wages are up. The service sector is growing. So why is there all this press on the economic slowdown? Well peeps, drama draws and we are a country fueled by the rhetoric around fear. The problem here is that we literally have the power to put ourselves into a recession by changing behaviors and preparing for a hypothetical recession whether it’s coming or not. My take is, unless you have a crystal ball (and let me know if you do), then sit back, enjoy your life and be optimistic about our future.
Lindsay Fricks- Helping you, your family and friends Live & Love in Arizona!
