For the past few months, the word recession has been hitting the news wires almost as often as Britney’s custody battles. Experts use all sorts of indicators to determine when a recession hits. Perhaps the most common one is the GDP, or gross domestic product. GDP measures, in dollars, the value of all goods and services produced in a country. When the GDP goes up, it means companies are producing more and consumers are buying more. In short, the economy is growing. When the number goes down for two consecutive quarters, economists raise the recession flags.
During a recession, the economy shrinks for a certain time period, usually between six months and two years. Companies earn and produce less, and consumers (that’s you!) tend to keep their dollars tucked under their mattresses (or bras, in some cases). A shaky stock market, a housing slump, or a rise in unemployment can also be signs of a pending down cycle. Looking at the big picture, many economists feel the U.S. is on the verge of a recession or has just entered one. Here’s what you can do to ride out the economic storm, should the clouds roll your way.
