These days, you cannot turn on the news or scroll social media without hearing or reading the word “recession.” 

And when you hear it, your immediate response might be one of fear. Or, you might begin to wonder if you should start feeling fearful about the economy, especially your personal economy. 

I tend to get frustrated by the reporting on recessions. Not because I’m unaware of the financial challenges periods of recessions can present for families, industries, companies, and the government. 

But because the doom and peril tends to be ALL that is reported. 

Perhaps this is because it might come across as tone deaf to do otherwise, and to remind everyone: Though painful, recessions are natural

There is a flow to economic activity and its indicators: real gross domestic product, income, employment, manufacturing, and retail sales. Naturally, all of these ebb and flow due to any combination of factors. 

And on the off-chance you didn’t know, the National Bureau of Economic Research (NBER) defines a recession as, “a significant decline in economic activity that is spread across the economy and lasts more than a few months.” The NBER also determines when a recession starts and ends.

Seven Recessions/Three Reminders

On Friday, it was reported that inflation, as measured by the consumer price index, hit a whopping 8.6%. The highest increase since 1981. For context, the inflation rate “averaged 3.27 percent from 1914 to 2022.” 

Concerns about inflation are heightening concerns about a recession. But did you know that within the last 52 years, we’ve had seven (7) recessions? 

Pulling from a post by The Balance, here’s a snapshot as per NBER:

1970:: lasted from December 1969 – November 1970

1973-1975:: lasted from November 1973 – March 1975 

1980 – 1982:: lasted from January – June 1980 and then from July 1981 November 1982

1990- 1991:: lasted from July 1990 – March 1991

2001:: lasted from March to November

2008 – 2009:: lasted from December 2007 – June 2009

2020:: lasted from first quarter 2020 to November 2020

Context and circumstances

If you dig into the details of what triggered each recession noted above, most of the same indicators were affected. But the factors leading up to it were varied and unique. 

For example, the 1973-1975 recession was triggered by the OPEC oil embargo and policies of the Nixon administration. Unemployment peaked at 9.0%. 

Whereas, the 2008-2009 recession was triggered by the subprime mortgage and banking credit crisis. Unemployment peaked at 10%. 

And, we know what sparked the 2020 recession, which caused unemployment to peak at 14.7%.

In June of 2022, none of us can escape the fact that it costs more to live our daily lives than it did this time last year. Your grocery bill is higher; a tank of gas is higher; and the cost of housing (for both renters and buyers) is more expensive. Increasing the talk and concern about whether a recession is on the horizon.

So, I get there may be little solace derived from remembering that in 52 years we’ve had seven recessions. Yet, I think it is a fact worth keeping in mind.

Along with this: May’s unemployment was 3.6% and job growth remains strong – aka, hopeful signals. 

The reminder for you and me, by way of this brief timeline overview, is that context and circumstances matter. 

Just as the context and circumstances influenced when a recession occurred, how long it lasted, and how “deep” it was, context and circumstances matter when it comes to the decisions (financial and otherwise) that you and I make.     

Just as our policy makers and CEOs need to manage a delicate balance of looking back for guidance, facing the present day facts, and making decisions for the future that aren’t entirely based on what worked (or didn’t) in the past. You and I need to do likewise. 

Because even when the “indicators” remain static, the environment doesn’t.


Above, I shared four of the twelve recessions that happened in the 20th century and the three we’ve had thus far in the 21st century. What do you notice about this brief timeline? 

Do you see there’s at least one recession in every decade, and they happen almost every six years or so?

Given this pattern, why do we always seem to be surprised when recessions happen? 

Yes, we may be caught off guard by the timing, or the specific triggers, or the length of time. But, at this point in our economic, business and political history we really should expect a recession to happen and manage our cashflow, debt, and investments accordingly

Because nothing grows unbounded for an indefinite period of time. 

So, another reminder for you and me is this: Expect things to go off the rails, and plan accordingly. (By the way, this isn’t about being pessimistic; it’s about being prepared for multiple outcomes – including one where you don’t get what you most want.)


Economists often debate whether falling consumer confidence sparks a recession, or if it’s in response to one. And this debate will likely continue because of how humans behave, e.g., consumers being fearful even when economic conditions are relatively strong.

Last week, in a Fortune article, Peter Atwater, an adjunct professor of economics at William & Mary, said, in part, “Recessions are almost always preceded by some level of overconfidence…”

What struck me about this statement is the business and economic growth and expansion that occurred from November 2020 until about January 2022. Some Fortune 100-500 companies experienced record sales and profits; the same is true for small businesses. And for some, it continues still as of this writing. 

The stock market has taken a beating in recent weeks, but it crossed the 30,000 threshold on November 23, 2020 and recorded a historic high of 36,799.65 in January of this year. (Hint: now is a good time to buy…)

All of these are seedlings for overconfidence.

On the flip side, the personal savings rate has declined and is back to its September 2008 level of 4.4% after reaching a high of 10.5% in July 2021, according to data from the Bureau of Economic Analysis. Savings is declining, but spending remains strong, and debt is beginning to increase.

When things are going well, it can be hard not to get swept up in the momentum of it all. It can be hard to create and stick with guardrails that invite you to practice the discipline of restraint. 

But, Heed the Warning

Recessions may be natural. And, I personally hope we are not on the heels of having one – right now. 

However, if it turns out that we are already in it (which may be the case) or it’s just around the corner, let’s use the time right now to focus on the big picture. 

One potential positive spin of the doom and gloom reporting on an impending recession are the things it invites you and me to pay attention to, such as:

  • Focusing on building your cash reserves (personal + business)
  • Getting clear(er) about your goals – short-term and long-term
  • Not making/taking dramatic decisions/actions solely based on short-term pain and inconvenience

It can be hard to keep the big picture in focus when every day you’re getting bombarded with the message, “the recession is coming.” Yet for the sake of your financial and emotional health (and wealth), it is a choice I hope you’ll make.

p.s. Be sure to come back next week. I plan to expand on this topic especially when it comes to helping the elders in your life manage their finances.

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