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Nearly 4 in 5 Advisors Say the U.S. Economy Is in a Recession – Or Will Be Within the Year – 2023 Survey


According to the official definition of a recession, Americans haven’t entered one1. But despite what many economists are saying, advisors in the trenches see it differently.

In a survey of nearly 200 financial advisors who participate on SmartAsset’s SmartAdvisor matching platform, approximately 77% of advisors said that Americans are in a recession – or will experience one soon. Here’s why they are eyeing a potential downturn and the moves they recommend individuals make to shore up their finances.

It’s important to minimize the impact of a recession on your investment portfolio. Find a financial advisor who can help you today.

About 77% of Financial Advisors Say We’re in a Recession – or Headed There Soon

When asked, “Do you expect the U.S. economy to enter a recession in the next 12 months,” about 46% of advisors surveyed answered “yes” and approximately 31% said that they believe we are already in a recession. Nearly 15% of respondents replied that we are not in a recession and don’t think there will be a recession in the next 12 months. And almost 8% of respondents replied with a more detailed analysis by selecting “”Other (please specify).””

The response from advisors in this survey echo sentiments from a previous survey from SmartAsset. In August 2022, SmartAsset conducted a survey asking advisors whether they saw signs of the U.S. heading into a recession. At the time, 43% of advisors said yes and 37% said we were already in a recession.

The survey responses from last August came after the U.S. government announced that gross domestic product (GDP) fell 0.9%, making it the second consecutive quarter of negative GDP. When consecutive quarters of negative GDP occur, some analysts classify it as a recession.

Inflation didn't help calm recession fears as it reached 9.1% in June 2022. Additionally, the S&P 500 and Dow Jones Industrial Average (DJIA) were tumbling precipitously.

Since then, the U.S. GDP yielded positive gains in the last two quarters of 2022. Inflation has also leveled off. But despite those rosier economic signs, advisors still voiced concern about the possibility of a recession.

Why Advisors Say They're Seeing Signs of a Recession

Among those responding that there is – or will soon be – a recession, many pointed to rising interest rates, high inflation and the recent collapse of several banking institutions.

""I believe we will have some sort of recession induced by the rising rates in order to fight off the inflation issue,"" one respondent said.

Another stated, ""Rising rates were moving us in that direction. The banking crises, I think, will push us over the edge.""

One survey-taker said that a recession within the next 12 months will be short-lived due to the strength of the U.S. workforce and consumer base.

“I believe by (the first quarter of) 2024, we will enter a recession, but I think it will be a mild recession that was induced by higher borrowing costs and tighter money supply,”  the respondent said. “The strong workforce and resilient consumer will lead us out of it fairly quickly.”

Advisors who responded with ""Other"" had a range of reasons for doing so. One predicted a""downturn but not a full-scale recession."" Another predicted a recession in two years, instead of one.

How Advisors Say Americans Should Prepare for a Recession

To prepare for a potential recession, some advisors encouraged Americans to squirrel away additional funds for emergency spending and make sure to delay any unnecessary purchases.

“The playbook is increasing (and) maintaining cash reserves, owning higher-quality assets (both within equity and fixed income), and limiting the amount of discretionary spending (i.e. purchasing the jetski can wait a few more months),” one advisor responded.

Some advisors suggest that investors take advantage of the current certificate of deposit (CD) rates while adding quality assets to their portfolios.

“Build up your short-term cash bucket,"" another advisor wrote. ""Continue to build up investment savings, realizing you are getting a better-discounted price than in the past few years.""

Bottom Line

More than three-quarters of advisors surveyed by SmartAsset responded that we are currently in a recession or will experience it within the next 12 months. Some advisors recommended individuals shore up cash reserves and investment savings to prepare for a downturn.


Survey data for this report was collected by SmartAsset between March 29, 2023, and April 12, 2023. SmartAsset asked financial advisors, “Do you expect the U.S. economy to enter a recession in the next 12 months?”

Of the advisors surveyed, 197 responded to this question.

SmartAsset also asked, “Please explain your thoughts on a recession occurring in the next 12 months” and “If you expect a recession in the next 12 months, how would you advise clients to prepare?”

1National Bureau of Economic Research (NBER)

Tips on Investing During a Recession

  • One of the benefits of working with a financial advisor is having someone who can temper an investor’s emotional responses to economic uncertainty with objective analysis. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Use SmartAsset’s no-cost asset allocation calculator to get a quick estimate of how best to adjust your investment portfolio in light of your timeline and risk profile.

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