Reason for concern and optimism about the economy

WHAT EXPERTS SAY. >> TODAY, PEOPLE ARE FILLING UP THEIR GAS TANKS AND DEALING WITH THE NERVOUSNESS AGAINST THE ECONOMY. MATT WHITE SAYS HE’S NEVER SPENT $86 TO FILL HIS TANK BUT HE DOES IT TODAY AND IT’S MAKING HIM NERVOUS ABOUT A RECESSION. >> ALL PRICES ALWAYS GO UP. EVENTUALLY IT WILL CRASH AND DOWN. SO IT MAKES ME WONDERFUL. I HAVE A SAVINGS ACCOUNT AND THE 401(K) AND RETIREMENT PLAN TO CONSIDER. >> I DON’T KNOW HOW WORKERS ARE AEBL TO MAKE MEDICATIONS, FOOD, GASOLINE, CAR PAYMENTS, MORTGA, GE I DON’T KNOW. >> THIS IS THE CONCERN OF THE PUBLIC. ARE GAS PRICES AN OMINOUS SIGNAL OF TROUBLE AHEAD? HOW MUCH WILL THE AVERAGE PERSONS AND FAMILIES FIGHT IN THE COMING MONTHS? HEFREN-TILLOTSON PROVIDES A CAUSE FOR CONCERN AND OPTIMISM. >> WINDS END SLOWING, THIS IS A RECESSION. WE CAN SEE THIS FROM A FEW DIFFERENT SOURCES. A – HIGH GAS PRICES RESTRICT A MORE PART OF PEOPLE’S HOUSEHOLDS. SO Spend LESS. >> HEFREN-TILLITSON SAYS EFFECTS IMPACTED RETAILERS. LESS SPEED OF CONSUMERS TRIGGLES LAYOFFS. EXCESSIVE NUMBERS ON THE HOUSING MARKET ALSO CONCERN. THAT COMBINED WITH A NEAR 12-YEAR HIGH IN MORTGAGE RATES. IF PEOPLE ARE AFRAID TO BUY, IT COULD RESULT IN LAYOFFS IN THIS INDUSTRY. >> WHEN ALL THESE THINGS GO ON TO LINK AND SNOWBALL. YOU WILL HAVE A HUGE DECREASE IN SPENDING AND THAT TYPICALLY LEADS US INTO A RECESSION. >> HEFREN-TILLOTSON SAYS THIS IS THE ROAD TO A RECESSION. BUT OTHERWISE THERE IS NO CERTAINTY THAT IT WILL ACTUALLY H`PEN. >> CERTAINLY NOT THE BASIC CASE AT THE MOMENT, THE ECONOMY HAS STILL STARTED ON ALL CYLINDERS. THE ECONOMY RUNS VERY VERY GOOD ON MANY CYLINDERS. >> THEY SHOW OTHER SIGNS THAT THE ECONOMY IS GOING RIGHT NOW. THIS IS JOB POSTING NUMBER UNEMPLOYMENT

Reason for concern and optimism about the economy

Updated June 8, 2022 6:23 p.m. EDT

As the public grapples with rising gas prices and whether this is an ominous sign of a crippling recession, insights from Hefren-Tillotson’s Wexford office tend to encourage patience to see how things play out. Hefren-Tillotson senior vice president Jayme Meredith said if indicators continue to fall over the next few months, a recession is a possibility. He points to inflation numbers for commons that could scare spending. “If spending slows, that’s a recession,” he said. “And we can see that from a few different sources: A, high gas prices take up a bigger chunk of people’s budgets, so they spend less,” he said. Meredith said spending less is creating a domino reaction that’s being felt by retailers. With fewer consumers shopping, lost sales and layoffs could come into play. Meredith also points to prices in the housing market, along with a near 12-year high in mortgage rates, which could deter buyers and in turn trigger layoffs in this industry “If all these things keep multiplying and entrenching, you’ve got a big one Decrease in spending, and that usually leads us to a recession,” he said. However, Meredith said that this is theoretical, with no clear evidence that it happened. For example, he says consumers are still spending and available jobs outnumber unemployment two to one, so there’s no guarantee a recession will hit. “That’s certainly not the baseline scenario right now. On many cylinders, the economy is doing very, very well,” he said.

WEXFORD, Pa —

As the public bickers over soaring gas prices and whether it’s an ominous sign of a crippling recession, insights from Hefren-Tillotson’s Wexford office urge patience to see how things play out.

Jayme Meredith, a senior vice president at Hefren-Tillotson, said if indicators continue to fall over the next few months, a recession is a possibility.

He points to inflation figures for commons that could scare spending.

“If spending slows, that’s a recession,” he said. “And we can see that from a few different sources: A, high gas prices take up a bigger chunk of people’s budgets, so they spend less,” he said.

Meredith said spending less is creating a domino reaction that retailers are feeling. With fewer consumers shopping, sales declines and layoffs could come into play.

Meredith also points to housing market prices, along with a near 12-year high in mortgage rates, which could deter buyers and in turn trigger layoffs in the industry.

“If all of these things keep getting worse and snowball, you have a big drop in spending and that usually takes us to a recession,” he said.

However, Meredith said that is theoretical, with no consistent evidence that it will actually happen.

For example, he says consumers are still spending and available jobs outnumber unemployment two to one, so there’s no guarantee a recession will happen.

“That’s certainly not the base case at the moment. The economy is still not running on all cylinders, but on many cylinders the economy is doing very, very well,” he said.