What Are The Signs Of A Recession? Can You Grow During A Recession? | DTSM 100
Written by Dave Lorenzo on November 26, 2019 / Inside BS Podcast
Is there a recession coming? What should you do about it? These are both great questions. But the first thing you need to know is “what is the meaning of recession?”
A recession is two consecutive quarters of negative growth of the United States Gross Domestic Product (GDP). This is the technical, economist definition.
A slow economy or an economic downturn could be GDP growth of 1% or less. So, while a “textbook” recession is negative growth for two quarters (six months), it will feel longer because after things slow down, the recovery process is slow.
Now that you can answer “what is the meaning of recession?” is there a recession coming? Here are some signs that will let you know:
– Manufacturing slows down
– Real estate purchases slow down
– Retail sales slow down
– Travel (both corporate and leisure) slows
– Unemployment increases
Unemployment is one of the last things to be affected but it’s the thing that everyone looks at. Typically, companies begin laying people off only after they’ve already shown weakness in revenue.
Notice I didn’t say anything about the stock market. Typically, the stock market reacts negatively to these factors; but people buy and sell stock for hundreds of reasons – some related to the broad economy and some unrelated.
When you see the signs I listed above, you should instruct your sales team to focus on the following sectors: energy, health care and government.
These sectors tend to continue to buy, even during slow economic conditions.
So, is there a recession coming? Knowing what is the meaning of recession, you can now spot the signs and start guiding your sales team to make the right choices.