George Gammon: It’ll Start Oct 1st… Here’s Why

An increasing number of economists are lowering the chance of a recession in the next year. Instead, they see the potential for a “soft landing” for the economy. That means slowing growth, but not a recession.

However, despite slowing inflation and a slowing economy, there could still be the potential for some danger ahead. And a few overlooked signs could point to danger for both the economy and the stock market.

There’s even the potential for the economy to move into a recession in the next month. That’s due to a number of reasons.

First, student loan repayments are restarting following years of being paused for the pandemic. The resumed payments will mean millions have to pay down debt each month. That’s money that will no longer be going into the economy on consumer spending.

Reduced consumer spending could create a feedback loop. As companies have less capital coming in from consumers, they may be forced to slow down and lay off employees. Those laid-off employees will then have to cut back on their spending.

That feedback mechanism could lead to reduced spending in the economy sufficient to send things into a recession.

With three out of five Americans living paycheck to paycheck, the loss of a paycheck means an economy that’s slowing could quickly slide into one that’s stalled out.

To look at the other factors that could lead to a recession, click here.