Why this financial planner says we shouldn’t worry about a recession (yet) – Albany Business Review
Why this financial planner says we shouldn’t worry about a recession (yet)
By Chelsea Diana – Reporter, Albany Business Review
The economy has been strong for more than 10 years, after a run like that investors start to wonder — when is the next recession?
Steven Bouchey, president and CEO of the Bouchey Financial Group, said there is no reason to think a recession is coming this year or next year. And he is saying that even after a tumultuous end to 2018 that sent stocks dropping in December.
“So many people talk about it, but I do not think there’s a recession in the near future,” Bouchey said to the Albany Business Review. “We may not have one this year or next year.”
But, it could be the beginning of the end.
Martin Shields, vice president of the Bouchey Group, said the firm looks at 10 leading indicators, from household debt to wage inflation, to evaluate the strength of the local and national economy. All those indicators are still strong or reasonably strong right now.
That being said, Shields stressed that growth is expected to slow this year in what he says is the last quarter of one of the longest running bull markets in modern history.
“I do think it’s important if it’s a business to know you are in the latter part of the business cycle,” Shields said.
Bouchey said there are key indicators that the economy will remain stable this year: Low household debt, rising hourly wages and the Federal Reserve being more conservative in raising interest rates.
“Wage growth is starting to occur,” Shields said. “We’re seeing small business owners struggling to find good people and retain people and having to pay to do that. It can get to a point where wage growth is a negative. It can cause inflation.”
The warning signs, they said, are when unemployment comes close to wage growth. As those two get closer, it is a good indicator that you could get closer to a recession.
“Inflation has been tame the last 10 plus years,” Shields said. “If inflation remains low and the [Federal Reserve] will be dovish on rising interest rates, it will allow this economy to continue going up.”
Bouchey Financial Group provides personalized wealth management services for individuals, families and businesses. Bouchey Financial Group had $460 million in 2017 year-end assets under local management among 490 accounts. The firm was started by Steven Bouchey in 1995. It recently expanded, adding two new employees for 10 total.
Albany Business Review recently published the above article based on an interview with Steven Bouchey and Martin Shields. Please visit their website at https://www.bizjournals.com/albany/news/banking-and-financial-services for similar content.