Los Angeles, California based Family Title Loans has recently issued a public advisory about a possible recession that might soon hit the US, and how Americans can survive from it by becoming more financially prepared.
“It is very hard to tell exactly when it will hit us, but the market has already been exhibiting a number of tell-tale signs that another recession is brewing,” says Casey Ryeback from Family Title Loans (FTL).
In 2018, the overall unemployment rate in the US dropped to approximately 3.8%. This is significantly low, considering that it peaked to 10% in 2009. However, financial experts are wary that it will eventually result in a stagnant market that does not generate new jobs. Moreover, if the top performing employees demand too much benefits from their employers, companies may not be able to keep up, and even if they do, higher wages will only result in an increase in the inflation rate.
Another reason to worry, based on number of articles on FTL’s Press Advantage page, is that the yield curve is slowly yet consistently flattening out. The yield curve is a term used to describe the interest rates paid by short and long-term US Treasury bonds. Generally, the shorter the investment period, the lower the returns are. When the gap in the interest rates of short and long-term bonds shrinks, the yield curve flattens. If this happens, it will result in a collapse in the banking industry, since most of the banks’ profits are generated from long-term lending investments.
In addition to this, large unsettled credit card finances and consistently delayed payments are alarming factors that need to be considered. Statistics about credit card usage help in determining the current state of the economy, and heightened purchasing activities is good for the country’s GDP. However, accumulated credit creates a bigger problem, especially when the market is down. To recover from their losses, creditors will continue to increase their interest rates and cardholders will only find it even more difficult to settle their outstanding financial obligations. It may cause another collapse in the lending and credit system, as witnessed during the real estate crisis in the late 2000s.
According to FTL’s Digital Journal, one of the key indicators of the great recession of 2008 is the sharp decline in home and real estate sales. Based on the data from the National Association of Realtors, home sales have fallen for six straight months since the 2nd quarter of 2018. Meanwhile, Odeta Kushi, a senior economist for First American, explains that the housing market in 2019 will be mainly characterized by a continued rise in mortgage rates and surging millennial demand. The rising cost of owning a house deters a large portion of potential homebuyers from the market but, on the other hand, a large number of millenials will now be approaching or crossing their 30th birthday, which may contribute to an increase in demand.
Lastly, the high rate of inflation itself also helps paint a picture of the current status of the US economy. According to Investopedia, inflation can happen for a variety of reasons, including increased production cost, higher energy cost, and so on. In an inflationary environment, people tend to minimize leisure spending, reduce overall spending, and begin to save more. As individuals and businesses restrict their expenditures, GDP declines and unemployment rates rise due to companies laying off workers in an attempt to reduce costs. It is these combined factors that cause the economy to fall into a recession.
With these signs that may already suggest a possible recession, FTL highlights the importance of accumulating wealth by diligently saving money, having several sources of active and passive income, as well as diversifying personal investment portfolios.
“Meanwhile, it is also very important to invest in your personal skills to ensure your job stability. In a very volatile market, it is extremely crucial to make yourself worthy and relevant to secure your job, as well as protect your primary source income. In addition to this, the more you invest in yourself, the more you increase your employability,” Ryeback said.
Those who are looking for financial assistance in Los Angeles and the surrounding areas may visit Family Title Loans’ website to learn more about their full range of services, latest news, and important announcements.
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For more information about Family Title Loans, contact the company here:
Family Title Loans
Casey Ryeback
(844) 254-7170
info@familytitleloans.org
445 S Figueroa St #1925, Los Angeles, CA 90071
