Is there going to be a recession in 2022?

The big question is, will we have a recession in 2022? Or you may be curious, what is a recession? A recession is when two negative quarters of GDP occur consecutively. Right now, it’s possible that we’ll have a negative GDP by the conclusion of Q2 2022. This would mean it will take another negative quarter to trigger a recession.

According to historical financial records, recessions happen about once every five years. When they occur, the average drop in the stock market is around 30% and can take up to a year to recover. Keep in mind the stock market is much different from the economy. The stock market is usually six months forward-looking from the economy, so we might already be in a recession from a stock market perspective. Fortunately, every recession is different and is not always severe. The market might only have a 30% drop within the timespan of a year and would most likely rebound. Recessions are healthy and are part of your overall financial plan so there is no need to panic.

Have more questions? Contact Us

Matthews Barnett, CFP®, ChFC®, CLU®
Financial Advisor

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