Is a Recession Coming Soon? Here's What Suze Orman Thinks

Should you be prepared for an economic downturn?

A recession is a period of economic downturn. In the U.S., the National Bureau of Economic Research is the authority that officially declares the country is in a recession. The NBER defines this economic condition as, "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."

Recessions are a natural part of the economic cycle, but it's smart to be prepared for them because they can affect your finances. It can sometimes be hard to predict when the country will enter a recession though.

However, finance expert Suze Orman believes one is coming soon -- so you may wish to heed her advice and start getting ready for tougher economic times. 

Suze Orman on recession timing 

Orman recently issued a warning about the potential for a recession in the coming months. 

"I do believe that we're going to go into recession at either the end of this year, 2022 or the beginning of 2023," Orman said in a September podcast addressing the costs of pet care. 

Orman went on to explain that she believes costs will continue rising over the coming months, in large part due to ongoing inflation. And, she explained that many people could find themselves struggling to pay for the essentials with prices up already and an economic downturn on the way. 

Orman isn't alone in predicting troubled economic times

Orman's September warning about an imminent recession this year or next is just the latest in a string of alerts from financial professionals suggesting bad times are coming. 

Jamie Dimon, the CEO of JP Morgan, also predicted a recession in 2023. So did Bloomberg economists, who said there is a 100% chance of a recession over the coming year based on the Bloomberg Economics probability model. The expert who predicted the 2008 financial crisis has also sounded the alarm, predicting not just a recession but a "long and ugly" one. 

There is ample reason for these experts to suspect a future economic downturn -- including the fact that the country has already experienced two quarters of negative GDP growth in recent months. This is one of the traditional signs the country has slipped into a recession already. 

With so many financial professionals indicating they believe an economic downturn is going to come sooner rather than later, it may be time to start shoring up your finances now. This can mean increasing the money you have saved for emergencies in a high-yield savings account in case of a job loss or income cut, as well as working on paying down debt and cutting expenses so you won't have to cover such large monthly bills if times get tough. 

If you can take steps to prepare for a recession before the downturn happens, you should be more easily able to cope with the consequences if consumer spending drops and companies start laying people off. It's best to get started on recession-proofing your finances ASAP since experts believe there's not much time left before the trouble comes.