Friednash: How will Colorado fare the recession if it comes?

There are legitimate reasons to worry about a recession.

Inflation is at a 40-year high and Americans are paying record-high prices for gasoline. For just about everyone, the basic cost of living has skyrocketed.

According to a recent story in The Denver Post, the typical Colorado household has spent $4,467 more per year since 2020 because of inflation. The story notes that, although labor shortages are helping push up wages, pay increases are covering less than two-thirds of the most recent price spikes. That is not a sustainable proposition for many workers.

Millions of Americans are dipping into their savings accounts to cover routine expenses such as rent, groceries and utilities.

Meanwhile, the skittish stock market has cratered and is likely to fall even farther depending on how nervous investors react to the Federal Reserve’s historic interest rate rise. Then there’s Russia’s war in Ukraine.

One good friend told me that because of the drop in his retirement account he is reevaluating whether and how he might retire. He has to decide if he will still retire in two years — and live less comfortably in retirement — or continue to work to make up the difference.  Another friend, a single mother, has canceled her summer family plans and instead had to get a second job to make ends meet because her savings are now depleted.

These stories are not unique.

According to a recent poll conducted by the Colorado Health Foundation, nearly nine out of ten Colorado residents see rising living costs as an extremely or very serious problem.

Jamie Diamond, CEO of JP Morgan Chase is predicting an “economic hurricane….we just don’t know if it’s a minor one or Superstorm Sandy.  You better brace yourself.”

Indeed, economists predicting our economic future are no better than prognosticators opining on the outcome of the Stanley Cup Finals, which of …read more

Source:: The Denver Post

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