HerMoney with Jean Chatzky – Episode Summary: "Are We Headed For A Recession?"

Release Date: March 14, 2025

In this insightful episode of HerMoney with Jean Chatzky, host Jean Chatzky engages in a comprehensive discussion with economist Katherine Edwards to explore the pressing question: Are we headed for a recession? The conversation delves into the nature of recessions, current economic indicators, the impact of tariffs and trade wars, personal financial strategies during economic downturns, and the implications for women in the workforce, particularly concerning the gender wage gap.

1. Understanding Recession

Defining a Recession

Jean Chatzky opens the discussion by addressing the growing anxiety surrounding potential economic downturns. She introduces Katherine Edwards, an economist and Bloomberg contributor, to unpack the complexities of what constitutes a recession.

• [04:01] Katherine Edwards: "A recession is a downturn in economic activity that exhibits certain features. It hits certain beats, but typically you see a pullback of economic activity. People spend less money, there's layoffs in the economy, and the labor market slowly recovers."

Evolving Definitions

Edwards elaborates on the traditional definition of a recession—two consecutive quarters of negative economic growth—and explains how modern assessments by the National Bureau of Economic Research (NBER) consider a broader range of economic indicators before declaring a recession.

• [04:29] Katherine Edwards: "The way that we figure out whether or not we're in a recession is that there's a group of economists at the National Bureau of Economic Research that monitors all the data of economic activity..."

2. Current Economic Climate

Market Volatility and Indicators

Jean discusses recent market instability, highlighting President Trump's acknowledgment of a "period of transition" and the subsequent stock market downturns.

• [01:38] Jean Chatzky: "President Trump acknowledged that, quote, this is a period of transition, end quote...as of Wednesday morning...Trump has imposed 25% tariffs on all steel and aluminum imported into the U.S...."

Despite these unsettling signs, Edwards provides a balanced perspective, noting that such fluctuations are not uncommon and do not necessarily signify an imminent economic catastrophe.

• [06:00] Katherine Edwards: "Recessions are normal. In fact, it kind of even feels like we might be overdue."

3. The Role of Tariffs and Trade Wars

Impact of Tariffs on the Economy

The conversation shifts to President Trump's imposition of tariffs on steel and aluminum, with Edwards explaining the economic rationale and potential repercussions.

• [12:13] Jean Chatzky: "Can you explain why he might believe that a recession is necessary and how tariffs fit into that picture?"

• [12:51] Katherine Edwards: "The appeal of tariffs... does not play into reality... tariffs lead to retaliation, tariffs lead to higher prices."

Trade Wars in Action

Edwards illustrates the dynamics of a trade war, emphasizing the cycle of retaliation and its detrimental effects on consumers and businesses.

• [15:37] Katherine Edwards: "It's looking like one now... It's a tit for tat of if they charge this, then we'll charge this."

4. Navigating Personal Finances During Economic Downturns

Strategies to Safeguard Finances

Jean and Edwards delve into actionable advice for individuals to manage their finances amid economic uncertainty.

• [20:21] Katherine Edwards: "The number one move is not to panic... Recessions happen every five to 10 years and while they can be devastating, they don't portend a different economic future than the one we had before. So don't panic."

Building Financial Resilience

Edwards emphasizes the importance of maintaining financial stability through paying off credit card debt, bolstering savings, and enhancing job security.

• [22:00] Katherine Edwards: "Make sure your financial house is in order to the extent that you can. You got a credit card, try to pay it off... If you have some money in savings, try to add a little."

Opportunities Amid Challenges

She also highlights that recessions can serve as catalysts for career pivots and entrepreneurial endeavors, encouraging listeners to view economic downturns as opportunities for growth and reinvention.

• [24:07] Katherine Edwards: "It's kind of like a pivot... during recessions is when we see a lot of new businesses start."

5. Gender Wage Gap and Women's Economic Security

Progress in Wage Equality

Towards the conclusion of the episode, the discussion turns to the gender wage gap, referencing a recent Pew Center report that indicates progress, with women earning 85 cents for every dollar earned by men.

• [29:14] Jean Chatzky: "The gap seems to be closing. Is it actually closing, or is it a mirage?"

• [29:14] Katherine Edwards: "It is not a mirage. It is true. And frankly, it's because we had policies in place that supported women that we have not had to a greater degree before."

Policies Supporting Women

Edwards attributes the narrowing of the wage gap to supportive policies implemented during the pandemic, such as federal assistance to the childcare sector and the proliferation of remote work opportunities, which have enabled more women to remain in the workforce.

• [29:14] Katherine Edwards: "One was because of all the noise that all of us made about childcare... the labor force participation rate for women with children under five reached the highest levels we've ever seen."

Advocacy for Continued Progress

She urges women to continue advocating for policies that support work-life balance and economic security, drawing attention to successful models in Europe that the U.S. could emulate.

• [31:52] Katherine Edwards: "There's absolutely no reason why that can't be part of US labor law... There's a lot of advocating we can do for women that the pandemic kind of backed us into."

6. Optimism for the Future

Resilience of the U.S. Economy

Ending on a positive note, Edwards reassures listeners of the inherent strength and stability of the U.S. economy, emphasizing that while recessions are challenging, they are not insurmountable and are followed by periods of growth.

• [31:57] Katherine Edwards: "Recessions are scary, but we live in a very stable economy. And whatever happens, we will get through. It won't be painless, but there's growth at the end."

Conclusion

This episode of HerMoney with Jean Chatzky serves as a valuable resource for women navigating the complexities of personal finance amid economic uncertainty. By demystifying the concept of recessions, analyzing current economic policies, and offering practical financial advice, Jean and Katherine empower listeners to make informed decisions. Additionally, the discussion on the gender wage gap highlights the strides made toward economic equality and underscores the importance of continued advocacy for supportive policies. Overall, the conversation balances caution with optimism, providing a roadmap for financial resilience in uncertain times.

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