Lauren Miller

December 28, 2023 - 06:30 am

The anticipated recession for the U.S. economy in 2023 did not materialize, leading experts to suggest the possibility of a soft landing or mild recession in 2024. Despite the optimism that a downturn might be averted, factors such as persistent inflation and interest rate hikes by the Federal Reserve are still seen as potential triggers for an economic decline.

Bank of America remains hopeful, predicting a soft landing rather than a recession, albeit acknowledging downside risks. According to a December survey by the National Association for Business Economics, 76% of economists believe the likelihood of a recession in the next 12 months is 50% or less.

Larry Adam, Chief Investment Officer at Raymond James, foresees a mild recession, possibly the mildest in history, starting in the second quarter of 2024. However, opinions vary among experts, with some suggesting the downturn could commence in the first quarter.

Despite the absence of a formal recession, the public perception of economic challenges remains significant. Surveys indicate that a considerable percentage of Americans already view the economy as being in a recession, with concerns reminiscent of the 2008 financial crisis.

Concerns about job security persist, with a notable percentage of companies expecting layoffs in 2024. To navigate these uncertain times, experts recommend taking specific steps, including:

Reduce Debt Balances: With higher interest rates, controlling debt is crucial. Automating payments, exploring balance transfer offers, or negotiating lower interest rates can help manage debt effectively.

Stress-Test Finances: Assessing your ability to withstand an income drop, considering potential job loss or reduced earnings, is essential. Establishing a financial safety net is advised.

Boost Emergency Savings: Automate savings to build a financial buffer for unforeseen expenses. Even a modest increase in emergency savings can provide resilience in challenging times.

In conclusion, while the U.S. avoided a projected recession in 2023, the economic landscape remains uncertain, prompting individuals to take proactive measures to secure their financial well-being.