How a recession affects you and your pocket

Could the US be on the verge of a recession?

This is what analysts say 2:26

(CNN Spanish) --

An economic recession is described by Julio Sevilla, a professor at the Terry School of Business at the University of Georgia, as a painful phenomenon that is caused by the decrease in economic activity in a country for two consecutive quarters.

According to this expert, a recession can occur when fewer products are produced and sold, wages fall and unemployment rises.

So, he says, there is less money on the streets.

Factors that contribute to a recession

How is the economic contraction in the US explained?

5:13

Sevilla, who has a doctorate in marketing from the University of Miami and a master's degree in international business from Florida International University, has published scholarly articles on consumer behavior, saying product shortages due to supply chain problems of supply is a factor that causes economic activity to decrease in an unavoidable way because, even when consumers want to acquire them, they do not have that possibility.

• The Dow falls 800 points on recession fears.

The increase in the cost of energy is another issue of concern, says Sevilla.

"In the coming months, something that we are going to be seeing is that with Russia's war in Ukraine, Europe will be greatly affected; 40% of its natural gas and 25% of its gasoline come from Russia, this also has an effect on other parts of the world, in China, in the United States, so it's another factor that can push prices up and lead to a recession."

Economic impact of the recession on the consumer

Unemployment is one of the biggest consequences of the recession, says Sevilla.

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• Bank of America warns recession 'shock' looming

"When we see economic activity slow down, there is less money on the streets, businesses have to start making painful decisions, and unemployment can rise."

Recommendations for consumers

Saving is, in Seville's opinion, the best weapon to deal with an economic recession.

His recommendation is to work a lot taking advantage of the job offer that is currently on the market.

"Save, spend only on important things, have a good reserve. Currently there is an advantage for low-income employees, those most impacted by a recession, wages have risen considerably and there are also jobs available," adds this expert.

Economic recession