Recession fears are high right now, and many people are worried about their financial futures. This is probably due to the fact that one of the most obvious effects of recessions is rising unemployment. That’s because when consumers stop spending money, businesses slow down or shrink, and jobs are lost.
This can create a vicious cycle, where fewer dollars in the economy means fewer jobs created, which makes consumers less willing to spend, and so on. The good news is that there are plenty of things you can do to prepare for a recession, like building an emergency fund and staying on top of your credit score. You can also diversify your investments, and be realistic about how much risk you can handle.
Another key thing to remember is that there’s no guarantee a recession will happen anytime soon. In fact, the likelihood of a recession this year is very small, according to some financial experts. However, if there are a series of economic shocks to the economy (like more tariffs from Trump) it could increase the chance that a recession will happen sooner rather than later.
That’s why it’s important to stay on top of the latest recession fears by following a real-time measure that quantifies the fear of investors. Unlike existing low-frequency measures and general proxies, our recession fear index is fully economic agent-determined by tracking keywords that are actually searched for on Google. That means we can capture real-time fluctuations in recession fears without being biased by irrelevant search terms or noise from other factors that impact markets.
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