What does a recession mean for everyday people?

Question

What ways can a recession have an effect on the common everyday Joe?

Answer 1

Generally not too much.

The average person is not too adversely effected by a recession. Yes, unemployment may be on the rise, and if you are one of the unemployed, obviously you are affected. But, with unemployment at around 5%, I would say the average person is working.

The average person may not see much of a raise at the end of the year (or no raise at all). Sure that effects them, but in reality, it does not really impact most folks day to day lives. Maybe they put off that new TV for a few months, or something like that.

Investments will take a hit. But, a savvy investor will be diversified enough to weather out a recession. Move some money from stocks to bonds, or just wait it out, stocks should be a long term investment anyway. The real savvy investor will buy up stocks at bargain prices during a recession.

What about the cost of day to day items? Is inflation costing the average person. Well, sure it is. Groceries are going up in price. But, no one is starving as a result. They can overcome the price increase by buying chicken instead of steak for dinner this weekend.

So, I would say that the everyday Joe probably does not get too impacted by a recession.

Answer 2

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RE:
What does a recession mean for everyday people?
What ways can a recession have an effect on the common everyday Joe?

Answer 3

What Does Recession Mean

Answer 4

Try researching it on Wikipedia. But it means that the economy is weak and prices inflate while pay goes down, therefore people spend less, prices rise more, people lose jobs, and it keeps on going until the economy begins to recover. It is one fourth of the economy cycle (the entire cycle takes around 8 years). If it gets too bad it is called a depression (such as the Great Depression). Don't worry, but be prepared.

Answer 5

Generally the two biggest factors are rising unemployment and wages stagnate.

Because of the recession, more firms tend to lay off employees, increasing the available labor pool. Because of this companies get very stingy with raises, or actually lower salaries of new hires, because there is increased competition for those jobs.

Answer 6

It is a downward cycle. Companies lay off people because not enough people are buying their products, the Company's stock goes down because their earnings are not as good as last year, as people are layed off they buy less goods and more Companies have poor earnings etc. The people who have jobs are scared that they might lose jobs so they don't buy goods or invest in the stock market (because stocks are going down). It is not fun and affects most people directly or indirectly.

Answer 7

No jobs, devaluation of retirement accounts -devaluaton of value of real estate (home)