If the we think of the economy as a traffic light, the “proceed with caution” indicator is now flashing wildly. Some of us will choose to slow down and take notice. Others will speed up and drive right through. A troubled labor market, rising household stress, record high debt levels, and persistent inflation are all symptoms of an economy in trouble.
A downturn, a slump, a contraction — call it what you will but recessions can lead to lower income, broken finances and lost wealth. How you proceed and how you protect your money could make or break your retirement and your future quality of life.,
The Layoff Data
Layoffs are considered a telltale recession sign and could be an indication of an imminent economic slowdown. Layoff notices in the U.S. surged last month according to new data from the Federal Reserve Bank of Cleveland which shows over 39,000 Americans in 21 states received Worker Adjustment and Retraining Notification Act (WARN), notices informing them of an upcoming layoff.[1]
While lower than the layoff spikes during the 2008 financial crisis or the 2020 pandemic, the new data reflects some of the highest number of notices since the Cleveland Fed started tracking data back in 2006. And, according to a major outplacement firm, American companies reported the most layoffs of any October in over twenty years!
“US companies announced the most job cuts for any October in more than two decades as artificial intelligence reshapes industries and cost-cutting accelerates, according to data from outplacement firm Challenger, Gray & Christmas Inc. Companies announced 153,074 job cuts last month, almost triple the number during the same month last year and driven by the technology and warehousing sectors. It’s the most for any October since 2003, when the advent of cellphones was similarly disruptive.”[2]
Main Street Worries
As Home Depot goes, so goes the economy. Indeed, the home improvement retailer offers a unique glimpse into the mindset of the U.S. consumer. Home Depot store performance is a fairly reliable gauge of consumer sentiment, do-it-yourself budgets, big ticket expenditure, discretionary home projects, etc. The home improvement giant recently sparked recession fears due to its dismal earnings report:
“The world’s largest home-improvement retailer said it expects adjusted earnings per share to decline 5% from a year ago, lower than its previous forecast. The company said its profit and comparable sales came in lower than expected in the last quarter, citing the overall weakness in the housing market … Home Depot’s bleak forecast provides another warning about the strength of US consumers in the absence of official economic data during the US government shutdown.”[3]
Home Depot data touches several industries including housing, construction, and of course consumer spending. These sectors are the economic engines of the economy during boom times but when they suddenly contract, they can be a red flag warning of a financial crisis and impending recession.
Suffice to say that Home Depot earnings reflect the temperature of Main Street and the pulse of everyday shoppers, small businesses, investors, and the housing market and have become a key economic bellwether.
Inflation Pain
One of the most critical recession indicators, however, is persistently high inflation — steadily rising prices can curb consumer spending, weaken purchasing power, stifle business investment, and undermine overall economic growth.
New Data from Bank of America indicates that almost a third of Americans are living paycheck-to-paycheck and not only struggling to get by but also falling behind on minimum payment obligations. This creates significant financial pressure as prices for many have surpassed wage growth. And the resulting affordability crisis spans all generations.
“According to Bank of America internal data, in 2025 nearly a quarter of all households are estimated to live paycheck to paycheck … We define living ‘paycheck to paycheck’ using a fairly broad definition of necessity spending covering areas such as housing, gasoline, groceries, utility bills, internet service provider subscriptions, public transportation, and childcare. We then identify the proportion of households in which necessity spending is more than 95% of their household income, leaving them relatively little or nothing left over for ‘nice-to-have’ discretionary spending or savings. We use this as our central indicator.”[4]
High inflation is both pervasive and invasive as it erodes savings, reduces one’s standard of living, and preys upon those trying to live off of fixed incomes, retirements and/or pensions plans. It also acts, as Warren Buffett has noted, as “a devastating tax that consumes capital” and consequently impacts businesses, commerce and corporate growth.
5 Easy Ways to Recession Proof Your Money!
With all of these factors in play, recession chatter is reaching fever pitch and some strategic financial moves are warranted to protect your portfolio.
According to Kiplinger, there are five things you should consider doing right now:
- Keep Extra Cash.
Even against a backdrop of high inflation, if you find yourself in the belly of a recession, it’s well worth having some dry powder (cash) on hand. Over the last hundred years, U.S. recessions have had an average length of just under 13 months … Keeping a healthy level of cash throughout a recessionary period can be worthwhile, even if it loses value in the short term.
Use Commodities.
If you don’t keep an allocation of commodities in your portfolio, now might be a good time to consider doing so. During a recession, the world keeps spinning, and many commodities will still be in high demand … And it’s often best to invest before we hit a full-blown recession and prices rise (because everyone else has the same idea!).
- Think Outside the Box.
A recession is an excellent opportunity to get creative with your investment portfolio.
Most of the time, you’ll want to focus on protecting your wealth rather than looking for big gains when growth is slow, because those high returns become increasingly challenging to find!
Yet, there can still be opportunities out there.
- Look for Recession-Proof Stocks.
Some people make this sound easy. The truth is, it can be pretty difficult. But it’s not impossible.
Life carries on during a recession, and plenty of businesses will still make money. Finding the stocks that will perform best can be tricky. Your best bet is to look at what’s worked in the past, then adapt these picks to your investment strategy and the current economic climate.
- Make the Most of Your Accounts.
This way of diversifying is a bonus. It’s important to use your full range of investing options during a recession, but it’s also vital that you make the most of all the accounts at your disposal.
This means making the most of any tax-advantaged investing and retirement accounts that are tax-deferred or tax-exempt, including Tax-exempt Roth IRAs and Roth 401(k) plans and Tax-deferred Traditional IRAs and 401(k) plans.[5]
During recessions, traditional risk assets like stocks, high-yield bonds and real estate tend to lose value. Precious metals, however, have a long historical track record of providing portfolio stability, protection and critical diversification.
Gold, Silver, Platinum and Palladium are not only a counterbalance to financial risk, they are tangible assets that can actually thrive when paper assets like CDs, equities, mutual funds, money market accounts, and cold hard cash — collapse.
At Orion Metals Exchange, we can help you acquire investment-grade precious metals at a fair price to prepare for the coming contraction, slowdown, and investor panic that all indicators suggest may now be imminent.
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[1] https://www.cbsnews.com/news/layoffs-warn-notices-october-employment-economy-federal-reserve-report/
[2] https://www.bloomberg.com/news/videos/2025-11-06/us-companies-announce-most-oct-job-cuts-in-20-years-video
[3] https://www.bloomberg.com/news/articles/2025-11-18/home-depot-cuts-forecast-on-weak-demand-for-big-ticket-items
[4] https:/institute.bankofamerica.com/content/dam/economic-insights/paycheck-to-paycheck.pdf
[5] https://www.kiplinger.com/investing/ways-to-diversify-your-portfolio-during-a-recession
