Are We Headed For A Recession?

The signs are there

Photo by Pixel Shot on Unsplash

Unemployment numbers are creeping up. Many federal workers are still trying to find jobs. Not all were rehired. In the chaotic restructuring following the massive layoffs, some were fired, rehired, and fired again, and the saga continues.

Tech companies are still laying off personnel. The Tech layoff tracker shows that quite clearly. And it’s not just technology.

A massive layoff wave seized the retail sector in 2025 with 4010 store closures. 2000 stores are already scheduled to close this year from Macy’s and Walgreens to Pizza Hut locations.

Eddie Bauer, a staple in a nearby popular mall for decades, is closing all of its stores by May. When we recently shopped there, we were shocked, and the manager was frustrated. “Our store is doing really well.” No kidding. Before Christmas it was always so crowded there, it was tough to get to a cash register.

But that doesn’t matter. The ax will come down on all of them, and my Eddie Bauer membership points will go down with the ship.

More layoffs may happen in the near future. We have 3.5 million truck drivers in the US. Many others rely on driving others for a living. Self-driving cars are about to threaten a whole industry.

If people losing jobs isn’t bad enough, living costs are going up at the same time. Gas prices are increasing again (inflation, the war with Iran). Taxes are rising. The big Beautiful Bill may have kept the lower tax brackets, but other taxes are increasing.

We were supposed to get a property tax rebate. Instead taxes increased by $250. Our electricity bills just increased as well. People feel squeezed. How far will the paycheck go, especially if one of us was let go and we have to rely on one paycheck?

Finding a new job got harder as well. It now takes six to twelve months, and many job seekers complain about sending hundreds of applications just to be ghosted.

What do do?

It is always good to be prepared whether the recession will happen or not.

1. Have an emergency fund of three to six months. In terms of economic instability, six months is definitely better. People often find that daunting, but a six-month emergency fund covers only the basics: rent, utilities, food, and gas. If someone spends $3000/month on these essentials and another $2000 on streaming services, eating out, etc., those niceties have to go during an emergency. Therefore, the emergency fund would be $18000, not $30000, a sum much easier to accumulate.
2. Have more than one source of income. Set up a side hustle: food delivery, a lawn moving service, a podcast. People have different talents, but everyone is good at something they can do to make extra income. If you are reading this, you are already making some money here on Medium, probably as a side hustle.
3. Spend less. Cooking at home is cheaper and often more nutritious than eating out. Cut cable if you haven’t yet. Look at everything that you spend money on and cut back where it hurts the least. If you live with others in a family, etc., this is often a process of negotiation. As friend of mine who wanted to eliminate debt made it a game with his kids. What can we do together that costs little or no money? They discovered interesting museums (free entry on Thursday), feeding ducks in the local ponds, and the joy of fishing (with grandpa’s old gear).
4. Review your streaming services and subscriptions. Americans, on average, have seven subscriptions, some spending over $200/month. According to some surveys, many don’t even know what they pay for every month. Of course, this is more difficult to do now. I have to subscribe to Sirius XM to get music in my new car. BMW ticked off customers by trying to make the heated seats subscription based — even though the customer paid for the seats and heating coils. After an outcry, BMW scrapped that idea. Perhaps you will find some subscriptions you can do without.
5. Update your skills. Is your career threatened by AI? Learn how to use it. If your career meets a dead end, go back to school or earn a certificate in something useful. A neighbor who is in the middle of a divorce and has never worked is taking a computer class.
6. Above all, don’t panic. Don’t put all of your cash under the mattress. Don’t sell all of your stocks to buy gold. Make sure you are diversified and then ride out the storm.

Let’s hope the economy will recover and the situation is not as bad as it seems, but it’s always better to be prepared for whatever may come.