The holidays are over, that means it’s time to go back to the real world. But with so many questions looming in the economy, we are wondering: is there a financial hangover on the horizon? While we can’t see the future, our experts have combed the data and compiled a quick guide for what to expect economically in 2023.
Let’s have a closer look.
A Recession is Coming – But Will Be Mild
It’s been in the headlines for months, but how imminent is a global recession? Nearly 20 percent of economists surveyed by the World Economic Forum consider it “extremely likely.” But what does that mean for you? Expect companies to slow down on hiring as well as interest rates and inflation to keep rising. Check out our full guide for how to prepare for a recession here.
Consumers Will Keep On Spending
On average, household budget sheets are still looking strong, but it looks like consumers will need to dip into the cushion they’ve built up over the pandemic and 2022. Inflation keeps driving prices higher, so while consumers are purchasing less, they are spending more — and putting more of it on credit cards. Our advice? Pay off your credit card debt as soon as possible, because interest rates are expected to keep rising, making those monthly payments more costly.
A Slow on Hiring
The effects of the Great Resignation will still be quite visible during 2023. Currently, there are 4.3 million more job openings than unemployed workers in the U.S., with the food service industry estimated to be at least 300,000 workers short. Meanwhile executives in corporate jobs are preparing to slow hiring or start layoffs to cope with higher costs and lower revenues. Experts at JP Morgan warn that the U.S. could shed 1 million jobs in 2023.
Gas Prices Will Ride a Rollercoaster
Predicting gas prices is a tricky business as oil markets tend to be highly volatile. Things like demand, government policy, weather and geopolitics all play a factor in how much you spend at the pump. During the last quarter of 2022, consumers caught a break with a decrease of fuel prices all over the country. Price comparison app GasBuddy predicts that prices will hit a low in February of about $2.99 per gallon before spiking up to nearly $4 per gallon during peak summer travel months. Fortunately, our Pangea Pros have you covered with a guide for finding the most affordable gas.
The Rise of the Side Hustle
With budgets tightening, more people are on the hunt for additional sources of income. Some will do some “shift-share” work where businesses hire temporary hourly workers on short notice. Homeowners are increasingly looking to use their homes to earn additional income through short term rentals on sites like Airbnb. Uber, Lyft, TaskRabbit and Etsy shops also remain popular options for supplementing household income. See what other ideas for simple side hustles our Pangea Pros have here.
Preparedness is Key
Don’t let your economic worries keep you up at night: Stay prepared. Pay off your high-interest debts, build a safety cushion of savings and stick to your budgets. Keep healthy financial habits and you’ll be able to weather whatever 2023 throws at you — and Pangea is always here to help.
