Here are seven crucial financial suggestions to help you prepare for a recession.
How can I get ready for the next economic downturn?
Let’s clarify what an economic collapse is before we develop your economic collapse readiness checklist. Everyone’s definition is different, and what you should do about it is influenced by your definition.
What would life be like if the stock market plummeted 50%? What would be the reason behind this? How long would the economic downturn last? During this situation, where would you live, work, and send your children to school?
Equities of all kinds took a pounding during the Great Recession of 2008. I had been dollar-cost averaging a portion of my monthly company income into US mutual funds up until that point, assuming it was all I needed to succeed.
During the recession, I discovered that US mutual funds alone do not provide adequate diversification. Real estate values were also falling at the time, so there was nowhere to hide.
While many markets were hit hard by the recession, frontier markets like Cambodia actually grew. As the economy rebounded, precious metals skyrocketed, and foreign currencies outperformed the US dollar for years to come.
Your financial crisis action plan is determined by your unique demands, such as monthly bills, debt levels, and where you intend to reside.
Here are some ideas that any successful entrepreneur or investor may use to help avoid the next financial disaster.
Was 2016 a year of recession?
The rate of economic growth in the United States has slowed, and manufacturing has entered a slump. Outside of the United States, growth is slow and appears to be dropping even more.
In what some have dubbed an earnings recession, corporate earnings decreased in 2015 and 2016. Similarly, typical company earnings are lower than they were a year ago.
Several of the warning signs of impending recession are now flashing yellow or red flags. Industrial production has been extremely low once again. The yield curve shifted to the right. Business investment is still at an all-time low.
What should I do to prepare for a Depression in 2021?
We’ve talked about how individuals survived the Great Depression in Survival Scout Tips, but today we’d want to take a look at the Great Depression from a different perspective. Rather of focusing on surviving the Great Depression, let’s think about what efforts we can take now to prepare for the Greater Depression, which experts fear could happen in our lifetime.
Before the Great Depression, some people took advantage of windows of opportunity, such as diversifying their income. We can learn from history and use this information to make better judgments to secure our livelihoods in the case of a Greater Depression because hindsight is 20/20.
Millions of people lost their jobs during the Great Depression. The percentage of women employed, on the other hand, increased. “From 1930 to 1940, the number of employed women in the United States increased by 24%, from 10.5 million to 13 million,” according to The History Channel. Despite the fact that women had been progressively entering the workforce for decades, the Great Depression forced them to seek work in ever greater numbers as male breadwinners lost their jobs.”
Women took on more steady jobs, such as nurses and teachers, as one of the causes. During the epidemic, we became accustomed to hearing about “essential workers,” or those who were required to keep the country running while other firms were closed.
Take action now to make oneself indispensable. Make every effort to convince your manager that you are an indispensable employee. This will not only keep you employed during a downturn in the economy, but it will also improve your prospects of getting a raise or advancing up the corporate ladder.
Don’t succumb to lifestyle creep if you follow step one and boost your income (where you start spending more as you earn more). Do the polar opposite instead. With economic uncertainty looming, now is not the time to go big. Instead, seek for ways to cut back on your spending. Look for ways to cut your utility and insurance payments, cancel unnecessary subscriptions, and stop buying new just because you can (you don’t need the latest cell phone model, for example).
Use the extra money you’re earning and the money you’re saving to cut back on your expenditures to pay off your debt. “Debt is an issue even when the economy is prospering,” Forbes writes. It’s an even bigger concern during recessions, when you may be facing the prospect of losing your job or seeing the value of your investments plummet.” You’ll have a higher chance of surviving the Great Depression if you have less debts.
You must also develop your savings in addition to paying off your debt. Many Americans, however, do not have an emergency savings account. If another depression strikes, having an emergency fund will go a long way toward ensuring your family’s safety.
Avoid placing all your eggs in one basket when it comes to income and savings. Diversify instead. This is not only how the majority of millionaires become millions, but it is also a sound financial approach. For example, if your company closes during a recession and that is your main source of income, you will lose all of your savings. You will have other means of survival if you start a side hustle now or make savvy investments (such as sin and comfort stocks, gold, or precious metals).
Many Americans are unconcerned with living over their means. “Experts believe that being in a persistent scenario of having little or no emergency funds is unpleasant, and even harmful,” according to U.S. News (let alone adequate retirement savings).
But, like the partially shut down federal government, which relies on borrowing to keep afloat and threatens another credit downgrade if the closure continues, economists believe Americans are unable or unwilling to live within their means. Credit is much easier to obtain and has evolved into a convenience rather than an emergency solution, according to experts.”
Many Americans use credit cards or bank loans to “buy” expensive cars, designer clothing, and luxury vacations that they can’t afford but convince themselves they can because they have a credit card.
People nowadays frequently use their debit or credit cards for all of their purchases. We shouldn’t invest all of our money in one bank, as the Great Depression demonstrated. That doesn’t imply you should hurry to the bank and deposit your whole savings account under your mattress. Instead, make it a priority to keep emergency funds on hand at all times.
Growing your knowledge base will not only make you irreplaceable at work, but it will also aid you at home if you experience a Greater Depression. Start learning about common household replacements and do-it-yourself solutions, for example. You won’t be able to buy things as readily or afford a handyman if a Greater Depression happens. As a result, it’s a good idea to learn as much as you can on your own.
Food and clean water will be among the first items to run short during the Great Depression. When things do return to stores, they may be rationed or at excessive costs. During the coronavirus scare, we witnessed this personally. Because natural calamities and economic turmoil are always a possibility, it’s a good idea to stock up on long-lasting emergency food and water purification equipment.
In the same way, start thinking about nonperishable things that would likely rise in price owing to inflation if a slump occurs. Consider what individuals bought in a panic in 2020 and hoard them now. Toilet paper, for example.
In a crisis, what is the best asset to own?
During a recession, you might be tempted to sell all of your investments, but experts advise against doing so. When the rest of the economy is fragile, there are usually a few sectors that continue to grow and provide investors with consistent returns.
Consider investing in the healthcare, utilities, and consumer goods sectors if you wish to protect yourself in part with equities during a recession. Regardless of the health of the economy, people will continue to spend money on medical care, household items, electricity, and food. As a result, during busts, these stocks tend to fare well (and underperform during booms).
In a recession, do housing prices fall?
Most markets, including real estate markets, experience price declines during recessions. Due to the current economic climate, there may be fewer homebuyers with disposable income. Home prices decline as demand falls, and real estate revenue remains stagnant. This is merely a general rule of thumb, and home values may not necessarily fall during real-world recessions, or they may fluctuate in both directions.
Before the market crashes, where should I deposit my money?
The best way to protect yourself from a market meltdown is to invest in a varied portfolio of stocks, bonds, and other asset classes. You may reduce the impact of assets falling in value by spreading your money across a number of asset classes, company sizes, and regions. This also increases your chances of holding assets that rise in value. When the stock market falls, other assets usually rise to compensate for the losses.
Bet on Basics: Consumer cyclicals and essentials
Consumer cyclicals occur when the economy begins to weaken and consumers continue to buy critical products and services. They still go to the doctor, pay their bills, and shop for groceries and toiletries at the supermarket. While some industries may suffer along with the rest of the market, their losses are usually less severe. Furthermore, many of these companies pay out high dividends, which can help offset a drop in stock prices.
Boost Your Wealth’s Stability: Cash and Equivalents
When the market corrects, cash reigns supreme. You won’t lose value as the market falls as long as inflation stays low and you’ll be able to take advantage of deals before they rebound. Just keep in mind that interest rates are near all-time lows, and inflation depreciates cash, so you don’t want to keep your money in cash for too long. To earn the best interest rates, consider investing in a money market fund or a high-yield savings account.
Go for Safety: Government Bonds
Investing in US Treasury notes yields high returns on low-risk investments. The federal government has never missed a payment, despite coming close in the past. As investors get concerned about other segments of the market, Treasuries give stability. Consider placing some of your money into Treasury Inflation-Protected Securities now that inflation is at generational highs and interest rates are approaching all-time lows. After a year, they provide significant returns and liquidity. Don’t forget about Series I Savings Bonds.
Go for Gold, or Other Precious Metals
Gold is seen as a store of value, and demand for the precious metal rises during times of uncertainty. Other precious metals have similar properties and may be more appealing. Physical precious metals can be purchased and held by investors, but storage and insurance costs may apply. Precious metal funds and ETFs, options, futures, and mining corporations are among the other investing choices.
Lock in Guaranteed Returns
The issuers of annuities and bank certificates of deposit (CDs) guarantee their returns. Fixed-rate, variable-rate, and equity-indexed annuities are only some of the options. CDs pay a fixed rate of interest for a set period of time, usually between 30 days and five years. When the CD expires, you have the option of taking the money out without penalty or reinvesting it at current rates. If you need to access your money, both annuities and CDs are liquid, although you will usually be charged a fee if you withdraw before the maturity date.
Invest in Real Estate
Even when the stock market is in freefall, real estate provides a tangible asset that can generate positive returns. Property owners might profit by flipping homes or purchasing properties to rent out. Consider real estate investment trusts, real estate funds, tax liens, or mortgage notes if you don’t want the obligation of owning a specific property.
Convert Traditional IRAs to Roth IRAs
In a market fall, the cost of converting traditional IRA funds to Roth IRA funds, which is a taxable event, is drastically lowered. In other words, if you’ve been putting off a conversion because of the upfront taxes you’ll have to pay, a market crash or bear market could make it much less expensive.
Roll the Dice: Profit off the Downturn
A put option allows investors to bet against a company’s or index’s future performance. It allows the owner of an option contract the ability to sell at a certain price at any time prior to a specified date. Put options are a terrific way to protect against market falls, but they do come with some risk, as do all investments.
Use the Tax Code Tactically
When making modifications to your portfolio to shield yourself from a market crash, it’s important to understand how those changes will affect your taxes. Selling an investment could result in a tax burden so big that it causes more issues than it solves. In a market crash, bear market, or even a downturn, tax-loss harvesting can be a prudent strategy.
Why is the US economy contracting this year?
The U.S. economy is expected to grow at a slightly above-average rate in 2017, according to participants in the Chicago Fed’s annual Economic Outlook Symposium, with inflation rising and the unemployment rate remaining low.
On December 2, 2016, the Federal Reserve Bank of Chicago presented its 30th annual Economic Outlook Symposium (EOS). The meeting drew approximately 100 economists and analysts from business, academia, and government. The forecasts for 2016 from the previous EOS are reviewed in this Chicago Fed Letter, followed by an analysis of the forecasts for 2017 (see figure 1) and a summary of the presentations from the most recent EOS.
In the third quarter of 2016, the US economy reached its eighth year of boom. While the country’s actual gross domestic product (GDP) is at an all-time high, the rate of economic growth since the Great Recession ended in mid-2009 has been extremely slow. The annualized rate of real GDP growth in the 29 quarters following the second quarter of 2009 was 2.1 percent, just slightly higher than what is considered the long-term pace of growth for the US economy. Furthermore, for the first three quarters of 2016, the annualized rate of real GDP growth was 0.2 percentage points lower than the current expansion’s average.
Weak investment (both business and residential) and government spending were the major drags on economic growth in 2016. In the first three quarters of 2016, real business fixed investment fell by 0.4 percent on an annualized basis. Moderate growth in the overall economy, excess capacity in the industrial sector, the collapse of energy prices lowering investment in this sector, the strong international value of the US dollar, and economic uncertainty during this past presidential election year could all be factors in the poor performance. After expanding at an annualized pace of 9.4% between the third quarter of 2010 and the final quarter of 2015, real residential investment declined by 1.6 percent in the first three quarters of 2016. Despite the drop in residential spending, the annualized pace of home starts grew to 1.16 million units in the first 11 months of 2016, an increase of 5.4 percent over the same period in 2015. During the first three quarters of 2016, real government spending expanded at an annualized pace of 0.2 percent, significantly below the 1.2 percent averaged over the previous 20 years.
Median forecasts of real gross domestic product and related items
In 2016, energy costs remained relatively low. In the fourth quarter of 2016, the price of West Texas Intermediate oil averaged $49 per barrel, up from $42 in the fourth quarter of 2015 but still significantly below the almost $80 per barrel it averaged in the 10 years leading up to the oil price crash in the middle of 2014.
Last year, consumer expenditure grew at a healthy rate: During the first three quarters of 2016, real personal consumption expenditures climbed at an annualized rate of 3.0%. Light vehicle sales (cars and light trucks) in particular remained strong in 2016, reaching a new high of 17.5 million units. Because energy prices remained low in 2016, more buyers chose to buy larger, less fuel-efficient automobiles than the previous year: In 2016, light truck sales (including sport utility vehicles) increased by 7.1 percent over the previous year, while passenger car sales decreased by 8.5 percent. Because of this remarkable shift in customer demand, light trucks accounted for a record-breaking 60.6 percent of all light vehicle sales in 2016.
Against this context, the economy continued to add jobs in 2016, with 2.16 million new positions added last year. Furthermore, in the fourth quarter of 2016, the unemployment rate was 4.7 percent, which is typically linked with full employment. Other labor market indicators, on the other hand, show that slack is still present. For example, by historical standards, there are still an unusually big number of part-time workers who want full-time work and a sizable percentage of unemployed workers who have been unemployed for more than six months.
By November 2016, inflation, as measured by the Consumer Price Index (CPI), has risen from an extraordinarily low 0.4 percent in 2015 to a still-low year-over-year rate of 1.7 percent.
Results versus forecasts
According to the consensus forecast from the most recent EOS, real GDP growth in the fourth quarter of 2016 will be 1.8 percent compared to the fourth quarter of 2015, which is lower than the 2.6 percent rate expected at the previous EOS. (For the remaining GDP component comparisons, annual numbers are determined using the most recent EOS consensus estimates for the fourth quarter of 2016.) While real personal consumption expenditures grew at a rate that was fairly near to expectations, real business fixed investment and real residential investment grew at far slower rates. In the fourth quarter of 2016, the unemployment rate was 4.7 percent, 0.2 percentage points lower than the amount projected for the fourth quarter of 2016. Inflation, as measured by the Consumer Price Index (CPI), is now estimated to be 1.4 percent in 2016, down 0.5 percentage points from the previous forecast of 1.9 percent. In the fourth quarter of 2016, the actual average price of oil was $49.20 per barrel, which was lower than the expected average price of $53.25 per barrel. In 2016, light vehicle sales totaled 17.5 million units, slightly less than the 17.6 million predicted. For the first 11 months of 2016, the annualized rate of house starts was 1.16 million units, hence total housing starts in 2016 are projected to fall short of the 1.24 million units previously forecast. In the fourth quarter of 2016, the one-year Treasury rate rose to 0.76 percent, well below the 1.04 percent expected. Instead of rising to the expected rate of 2.70 percent, the ten-year Treasury rate fell to 2.13 percent by the end of 2016.
Economic outlook for 2017
The pace of economic growth in 2017 is expected to be slightly faster than the long-term average. The real GDP growth rate for 2017 is estimated to be 2.2 percent, up from the 1.8 percent rate projected for 2016. The quarterly trend demonstrates a reasonably consistent real GDP growth performance throughout 2017. Given that economic growth is likely to be just slightly over its historical average, the unemployment rate in the fourth quarter of 2017 is expected to be 4.8 percent. Inflation, as measured by the Consumer Price Index (CPI), is expected to rise from 1.4 percent in 2016 to 2.0 percent in 2017. Oil prices are expected to rise, but stay relatively low; in the fourth quarter of 2017, they are expected to average $51.53 per barrel. In 2017, real personal consumption expenditures are expected to grow by 2.3 percent. This year, light vehicle sales are forecast to drop to 17.3 million units. In 2017, real business fixed investment growth is expected to rise to a healthy 3.2 percent. This year, industrial production is expected to expand at a rate of 1.9 percent, which is lower than the historical average.
In 2017, the housing market is expected to strengthen and continue its slow but steady return to normalcy. In 2017, real residential investment is expected to expand at a robust 4.5 percent annual rate. And, while home starts are expected to increase to 1.20 million units in 2017, they will still be considerably below the 20-year annual average of around 1.32 million.
In 2017, the one-year Treasury rate is anticipated to increase to 1.33 percent, while the ten-year Treasury rate will rise to 2.36 percent. The trade-weighted US dollar is expected to gain another 4.7 percent in 2017, bringing the country’s trade imbalance (i.e., net exports of goods and services) to $563.5 billion by the fourth quarter of 2017.
Consumer and banking outlook
Northern Trust’s executive vice president and top economist, Carl Tannenbaum, shared his predictions for consumers and the banking industry. To understand some Americans’ current dissatisfaction with the economy, Tannenbaum emphasized the importance of looking “below the surface” of headline economic data. According to a Gallup poll, one of the most pressing worries for Americans today is the state of the economy. Tannenbaum highlighted many economic indicators for the United States to explain this survey result. Tannenbaum began by identifying some promising trends. According to him, the recovery from the Great Recession is progressing nicely, though at a modest pace. Since the financial crisis, consumers have reined in their spending and restored their balance sheets, boosting their savings rate to slightly under 6% of disposable income (a healthy rate, according to Tannenbaum). In comparison to 2009, when the Great Recession ended, unemployment is significantly lower. Although the official unemployment rate has returned to pre-recessionary levels, there is still opportunity for improvement when marginally attached workers and those working part-time for financial reasons are taken into account. Tannenbaum explained that, on the whole, consumers have felt optimistic enough about the overall economy and their personal financial situations to increase their spending in recent years, citing increases in real personal consumption expenditures and the Conference Board’s Consumer Confidence Index.
When it comes to negative tendencies, Tannenbaum points out that residual debt is still a huge concern. Student loan debt, for example, continues to climb, impeding family formation. Furthermore, despite the fact that the housing market has been rebounding, about 12% of Americans with single-family home mortgages are still underwater. This, according to Tannenbaum, may be preventing job vacancies in particular labor markets from being filled since potential workers are unable to sell their houses and relocate for work. According to Tannenbaum, persons with at least a bachelor’s degree have seen bigger improvements in employment and income during the current economic expansion than those with lower levels of education. Furthermore, those in the bottom half of the income distribution are far more likely to lose their jobs, according to him. Tannenbaum cited the government debt and deficit, rising health-care expenses, and the negative repercussions of potentially decreasing trade with foreign countries as examples of the difficult economic situations Americans confront now.
When it comes to the banking industry, Tannenbaum has noticed that bank stocks have been performing well and that lending has increased. The nation’s largest banks, according to Tannenbaum, are properly capitalized, in part due to obligatory Federal Reserve stress testing, which examines how well these institutions would deal in the event of a future catastrophe. 1 Furthermore, credit circumstances are favorable (for example, borrowing costs are historically low), he added. Low interest rates, on the other hand, are causing public pension systems to struggle, as pension debt continues to climb and pension funding ratios (assets-to-liabilities ratios) decline. Low interest rates, according to Tannenbaum, may encourage some investors to “seek for yield” by investing in less well-known and riskier assets than government bonds. Tannenbaum, on the other hand, was upbeat about the banking sector’s near-term prospects.
Automotive industry outlook
Michael Robinet, managing director, IHS Markit’s automotive advisory solutions, gave his take on the industry. Global light vehicle production is predicted to rise from 91.4 million units in 2016 to 92.8 million units in 2017, according to Robinet. From 2016 through 2023, auto production is predicted to grow at a 2.2 percent yearly rate. He pointed out that, while the automobile industry has been a major engine of global economic activity in recent years, it is now likely to grow at a slower pace. From 2009 to 2015, worldwide light vehicle production climbed by around 29 million units, or about 50%, following the Great Recession. From 2016 to 2023, he expects auto output to rise by almost 17 million units, according to him. According to Robinet, the world’s two most populous economies are the key drivers of this forecast increase: China is expected to contribute for roughly 40% of the growth, and India for around 30%. Because of political and economic concerns, Europe’s auto industry has not contributed as much to global expansion in light vehicle production as it has in the past (e.g., the Greek debt crisis and Brexit). However, in the future, European auto production should play a larger role. Finally, he predicted that the subcompact and compact sectors will expand the most internationally over the prediction period.
In North America, Robinet expects annual light vehicle manufacturing to reach 18 million units in 2017 and 18.6 million units by 2023, according to his projections. Light vehicle sales in the United States are expected to peak in 2017 at 17.5 million units (up from the symposium’s consensus median forecast of 17.3 million units) and then progressively fall through 2023. According to Robinet, vehicle prices have risen as a result of inflation, new laws (such as those aimed at improving safety and fuel efficiency), and the integration of market-driven features (such as integrated Internet connectivity).
Finally, Robinet examined trends in North American auto production geography, as well as the transition toward new vehicle technologies that enhances fuel efficiency. Much of the sector is expected to continue to relocate to Mexico, owing to cheaper costs associated with shipping vehicles to end markets and inventory holding. Mexico, which is already a major vehicle exporter, will continue to expand its auto manufacturing capacity in the coming years. In terms of fuel-saving technology, Robinet predicts that automated rapid startstop systems for internal combustion engines (which reduce engine idling time) and the adoption of mild or full hybrid drivetrains will become more common in the future. Beyond 2020, Robinet envisions considerably more electrification of autos (including more cars that run entirely on electricity) than there is now.
Steel industry outlook
After a year in which overall steel consumption in the United States was down somewhat, Robert DiCianni, manager of marketing and analysis at ArcelorMittal USA, expressed optimism for the steel sector in 2017. Domestic steel consumption fell 1% to 105 million tons in 2016, compared to the previous year. Following a tiny fall in activity in 2015, nonresidential building, the largest end market for steel, rose modestly in 2016. Furthermore, in 2016, industrial production (including mining and utilities) declined, lowering steel demand. For example, the energy industry, which relies heavily on steel for extraction and transportation of oil and gas, reduced its steel usage by almost 3.5 million tons. Steel service centers, which act as a link between steel producers and end users, have sold off their stock, he added. Steel inventories have been at an all-time low since 2015. The capacity utilization2 of the US steel sector is below its long-term trend of 70%, which DiCianni believes is attributable to service centers not being in the market for steel. Over the last year or two, the steel market has been sluggish or tepid on the entire. DiCianni did say, though, that he believes the steel industry would have a better year in 2017. Steel consumption in the United States is likely to increase by about 3% in 2017, to 108 million tons, according to his prediction (lower than the 120 million tons that are consumed in a normal good year). Steel consumption in nonresidential construction is expected to rise by 6% in 2017, resulting in an increase of 1.2 million tons in demand. Steel use in the energy industry is forecast to rise by around 2 million tons this year. Steel should maintain its market dominance over other metals used in auto manufacture, such as aluminum, despite auto sales being flat or slightly down in 2017, he said. Steel inventories will begin to replenish in the first quarter of 2017, he said.
In 2017, global steel consumption is expected to increase by 0.5 percent to 1.51 billion metric tons. Steel consumption in North America and Europe is expected to rise by 2.9 percent and 1.4 percent, respectively. China’s steel consumption, on the other hand, is predicted to fall by 2%, reflecting the country’s sluggish economic growth. DiCianni pointed out that one trend in the global steel sector is an increase in steel prices, which is partially attributable to a rise in global steel demand and international trade rules that have reduced steel supply in some countries.
Heavy machinery outlook
Caterpillar’s regional chief economist for the Americas, Deanne Short, offered a favorable view for the heavy machinery industry. Short began by saying that the International Monetary Fund expects global real GDP growth to be 2.8 percent in 2017. She pointed out that when global real GDP growth exceeds 2.7 percent, heavy machinery sales often expand faster. According to Short, the North American heavy machinery industry will see some growth in 2017 due to a number of variables. Housing starts in the United States increased dramatically in October 2016, and modest increases in both housing permits and starts are predicted in 2017, she said. Furthermore, the Housing Affordability Index of the National Association of Realtors is considerably above 100, indicating that conditions are quite favorable for home buying. Short stated that, based on historical year-over-year variations in both residential and commercial real estate lending, credit is currently plentiful and not suffocating demand. Following the late-2015 enactment of the FAST Act3, spending on highways, streets, and other transportation infrastructure is likely to rise in 2017. Short also said that several state and local referendums were recently passed to boost infrastructure projects, but the economic benefit of these projects may not be noticed until 2018. Furthermore, the effects of any new big publicprivate partnership agreements for infrastructure projects may not be visible until 2019 or later. All of these recent improvements and expectations, according to Short, bode well for future heavy machinery sales.
Short stated that capacity utilization in the mining, oil, and gas industries has decreased, which is a bearish omen for future heavy machinery sales. Mining, according to Short, will remain depressed in 2017. She did, however, mention that the global mining industry’s earnings margins and capital expenditures have started to improve, which speaks well for heavy machinery sales beyond 2017.
Heavy machinery equipment consumption has been declining outside of North America in recent years, according to Short. This is most likely due to the mounting difficulties of China’s economic and financial reforms, surplus supply of some metal commodities (which has pushed down prices), and numerous political upheavals throughout the world. Heavy machinery sales outside of North America, however, are nearing a bottom, according to Short, and will likely begin to climb again in 2017.
Covering Chicago manufacturing from high above
Kris Habermehl, an airborne reporter for WBBM-AM (a Chicago-based all-news radio station), showed helicopter footage from the 1990s and early 2010s of Chicago’s Calumet Harbor. Habermehl discussed different vessels that have sailed Lake Michigan and docked at the harbor, as well as surrounding industrial production sites. He claims that a large portion of the industrial space has been repurposed or converted to green space. Habermehl stated that he wanted to provide a historical perspective on how things were done in the past, as well as how they are done more efficiently today, in his manufacturing reporting.
Conclusion
The US economy grew at a rate that was substantially in line with the historical average in 2016. The economy is expected to expand at a somewhat quicker rate in 2017 than it did in 2016. In 2017, business investment and the housing market are expected to rebound. By the end of 2017, the unemployment rate is forecast to be 4.8 percent, with inflation expected to reach 2%.
1 See https://www.federalreserve.gov/bankinforeg/dfa-stress-tests.htm for additional information on Federal Reserve stress testing for big bank holding companies.
2 Capacity utilization is calculated by dividing the actual output produced by installed equipment by the potential output that could be produced if it were used to its full capacity.
3 See https://www.transportation.gov/fastact for more information on the FAST (Fixing America’s Surface Transportation) Act.