U.S. Manufacturing Growth Hits 2-Year Low: Is a Recession Imminent?
- Many experts are sounding warnings about an upcoming recession.
- The Institute for Supply Management notes that manufacturing growth is at a two-year low, another indicator that a recession could happen.
A number of economic signs are negative right now.
At this point, consumers are increasingly coming to terms with the idea of a recession battering the economy in 2023. Not only is soaring inflation draining consumers' finances, but the Fed's interest rate hikes to cool inflation have the potential to lead to a widespread slowdown in spending. And in another sign that a recession could be imminent, U.S. manufacturing growth recently reached a two-year low, according to the The Institute for Supply Management.
If you're worried about a recession, it pays to do what you can to prepare for one. Here's how.
1. Shore up your savings
The scary thing about recessions is that they can lead to broad layoffs across a range of industries. And losing your paycheck could mean losing your ability to cover your living costs.
That's why it's so important to boost your personal cash reserves if you fear a recession is near. At a minimum, you should aim to have enough money in your savings account to cover a full three months of living expenses. And if you want extra protection (which wouldn't be a bad thing right now), aim for six months' worth of expenses in the bank -- or more.
The reality is that it's hard to predict how long any given recession will last. To be fair, we can't even say with certainty that a recession will definitely hit next year, so there's no point in speculating about its length. But it is worth noting that some economists are calling for a downturn that's rather prolonged, which is all the more reason to give your savings account a solid lift in the coming months.
2. Grow your job skills
Getting better at what you do won't guarantee that you won't get laid off if your company is forced to downsize its staff. But it could help you stay off the chopping block if layoffs come down the pike.
Think about the skills that are most essential to your job and work on improving them. But also, don't gloss over the importance of building on your soft skills -- those that apply to any job. Soft skills include things like time management, organization, and communication.
3. Consider a second job
If you're working full-time right now and managing your bills just fine, you may not feel compelled to strain your schedule by squeezing in a second job. But securing one could work to your benefit.
For one thing, that extra money could help you boost your cash reserves so you have more of a cushion. And also, that side gig could serve as a fallback option if you lose your full-time job and need some means of earning money until you find another.
The fact that several signs are pointing to a near-term recession is scary and frustrating. But the best thing you can do for yourself is prepare by bolstering your savings, making yourself a more valuable asset to your employer, and lining up a second job -- even if you don't really need one right now.
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