The stock market took one of the worst nosedives at the beginning of April as President Trump’s tariffs and plans to reshape the global economy seemed to only drive fear into the market, sending investors fleeing. Now everyone wants to know: is a recession on the way?
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It could very well be, with trade wars ramping up and inflation about to reach record levels. However, that doesn’t mean that they are the only factors driving a potential recession. In fact, a few other economic mechanisms are at play that could affect you and your family’s money.
Below are four surprising things that could impact your wallet if a recession hits.
Lower Gas Bills
If you have been feeling the strain of filling up your car’s tank, there might be a bit of a reprieve on the way if a recession does come: gas prices could fall. In fact, prices at the pump usually go down in a recession as lower demand can lower the supply and the cost, according to Marcus Sturdivant Sr., advisor, managing member and chief compliance officer at The ABC Squared².
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“This recession would be on the heels of tariffs and the U.S. publicly endorsing ‘drill baby drill’ as a strategy,” Sturdivant explained. “Flooding the market with gas during an economic slowdown, all things being equal, will make the prices at the pump lower, but the escalating tariffs, trade war and an environment where oil makes money at $70 per barrel versus the $100 per barrel of the past.”
Sturdivant pointed out that even with tariffs, with increased production, there is already a record domestic output, meaning that the price for fuel should come down.
Less Alarming Market News
The stock market can decline during a recession, but that does not necessarily indicate a cause for alarm in the opinion of William Bergmark, personal finance expert and finance editor at Credwise.
It’s only natural to get nervous when your investments drop, but recessions are a natural part of a healthy business cycle in the market. In my opinion, the most terrible thing long-term investors can do is sell because they’re afraid. If anything, bad times are a time to buy at cheaper prices — so remaining calm with a diversified fund is best most of the time.
Stable Entertainment Pricing
“Entertainment tends to be less hit by recession as individuals and families look for ways to get their minds off of their economic woes for a while,” Sturdivant explained.