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Things don’t look so good right now.

Key Point

• A recent survey revealed that 91% of CEOs believe a recession is imminent.
• Many believe the recession will last for a long time.
• This can affect your finances for several main reasons.

American business leaders aren’t optimistic about the direction of the economy. In fact, according to a survey conducted by his consulting firm, KPMG, about 91% of executives at the 400 largest US companies believe there will be a recession within the next year.

A recession has long been defined as two consecutive quarters of negative economic growth, but other factors, such as the unemployment rate, can also influence whether a country is in a recession. And some, including many CEOs, believe we’re on the brink of a massive recession that could seriously harm people’s finances.

Paul Knopp, Chairman and CEO of KPMG US, said there has been “tremendous uncertainty over the past two and a half years” about both the global pandemic and rising inflation concerns. , we are facing another looming recession.”

CEOs are pessimistic about more than a possible recession

KPMG’s investigation contained a lot of bad news. Not only has the majority of business leaders shown they believe a recession is coming soon, but many believe it will last for a long time. Just 34% of survey respondents said they thought the recession would be short, with 66% of those in the majority believing it was a long, bumpy road ahead.

Most CEOs surveyed also said they believe the coming recession will be more than just a recession. And many are watching the news about the upcoming midterm elections. This is because it could affect economic stability and prolong the economic slowdown.

“There is real uncertainty about the outcome of the midterm elections and the potential for tougher taxation and regulation,” warned Knopf.

Should I worry?

Clearly, there are compelling reasons to be concerned that most CEOs are warning that a prolonged recession is imminent in the United States. Many of these company leaders Also showed their business was taking steps now To prepare for the coming recession.

In most cases, businesses that prepare for a recession are most likely to lay off workers to cut costs and meet the reduced demand for their goods and services. and cut spending, the economy as a whole worsens.

Thus, the fear of a recession can be a self-fulfilling prophecy that business leaders will lay off workers in anticipation of a recession, and those workers will stop spending, causing a decline in demand. “Companies cannot overreact in the short term as this could cause problems in the long term,” warned Knopp.

If you work for a company that could get you fired due to future financial problems, you may be very worried right now, and for good reason. Similarly, if you’re in a difficult financial situation, whether it’s high credit card bills or struggling to pay your mortgage, you’re not well-positioned to handle a recession.

But if you have a large emergency fund, hopefully this extra will get you through until things turn around. While you may still have reasons to worry about job security (depending on where you work), at least you’ll know that your emergency savings can cover your necessities for a while if needed. .