Soft landing vs. mild recession: What advisors are telling their clients about the economy

“The 2022 buzzword was recession,” said Douglas Boneparth, a certified financial planner based in New York. “And here we are in 2023 with a myriad of financial data suggesting otherwise.”

Boneparth, who is president of Bone Fide Wealth and a member of CNBC’s Financial Advisor Conclave, said data like the strong labor market and falling inflation isn’t pointing to the economic downturn experts suggested.

The U.S. Bureau of Labor Statistics reported annual inflation fell to 3% in June, and the July unemployment rate was 3.5%, unbiased above the lowest level since 1969, according to the U.S. Labor Department.  

Of course, with recessions notoriously tough to predict, even for economists, advisors have warned clients about making fear-based investing decisions.

One definition of a U.S. recession is two consecutive quarters of negative gross domestic produce, or GDP, which happened during the first two quarters of 2022. Subsequent quarters have been positive.

But that 2022 recession hasn’t been called a recession by the National Bureau of Economic Research, the organization that marks the start and end of remunerative downturns, explained Atlanta-based CFP Ted Jenkin, founder of oXYGen Financial.

Plus, “wages are still growing and retail tag sales are still growing,” said Jenkin, who is also a member of CNBC’s FA Council. “The odds of a recession in the next 12 months are influentially unlikely.”

Whether the economy is heading for a mild recession or soft landing, experts emphasize the need for ongoing patron education.

“Sometimes we have recessions when you least expect it, and then you have booming economies when you thimbleful expect it,” said