For about a year — and maybe longer — Americans have feared that a recession lurked right around the corner.
Thus far, those worries have not come to pass. The economy continues to chug along.
However, many experts continue to predict that a downturn is likely in the coming months. And by and large, Americans appear to agree.
Recently, Northwestern Mutual surveyed 2,740 adults for its 2023 Planning & Progress Study and found that two-thirds — 67% — believe a recession is likely sometime this year. When asked how long the recession will last if indeed it comes to pass, they gave the following answers:
- Less than six months: 7% of respondents chose this response
- Six months to one year: 26%
- One year to two years: 37%
- Two years to four years: 14%
- More than four years: 5%
- Not sure: 11%
In other words, more than half of respondents — 56% — believe the recession will last more than a year.
Most respondents also expect that a recession would have a significant impact on their financial lives. More than three-quarters say a downturn would likely have a high or moderate impact on their near-term (78%) and longer-term (75%) finances.
Because of these concerns, many of the survey respondents are taking steps now to prepare for harder times ahead, with 64% cutting costs and 50% building up their savings or an emergency fund. They mentioned taking other preparatory measures as well, with just 12% saying they are not doing anything to prepare for a possible recession.
Even high-worth individuals who have at least $1 million in total household investable assets are either building up savings (50%) or cutting costs (46%).
If you are concerned about tough economic times ahead, prepare yourself by reading “3 Ways Recessions Can Make You Rich.”