LOUISVILLE, Ky. — We’ve all been paying more lately for our bills at the pump and for groceries lately. Many economists say those prices aren’t coming down soon.

To explain the latest economic trends in easy-to-understand terms, we spoke to a Louisville professor and economics expert.

The Dow plummeted nearly 486 points last week and experts at the New York Stock Exchange are calling it the lowest shift for the Dow of 2022.

Dr. Jose Fernandez, associate professor and the chair of economics department at the University of Louisville has spent 15 years at UofL being an expert in the field.

Supply shortage, inflation and stock market are all words you’ve heard for months, but you might ask what you could do to prepare for a recession. Dr. Fernandez says there're things people can do, no matter what age, when the economy points toward a recession.

“If you’re young, this could be a good time to buy stocks. Stocks could be on sale. You still have 20, 30 years of working,” said Dr. Fernandez.

The reason younger generations shouldn’t worry too much, Fernandez said, is because they’re far from retirement. Instead, they should buy into the stock market with low-risk stocks.

For people retiring, there’s greater concern with the current economy. This category of people will need to be more savvy with their money.

“If you’re about to retire, yeah, there are concerns. You may want to move more things toward bonds, cash and out of these stocks and more variable assets,” said Dr. Fernandez.

People retiring should prepare for market downturns that hint at a recession and pay attention to the state of the economy to avoid hurting their chances of retirement. But the expert says housing is a primary concern.

“Everyone that bought a home in the last five years or so, none of them are going to be incentivized to sell their home. Who’s going to sell a home when they’re paying 3% now they’re paying 6% on the new buy that they’re going to get? So that’s going to decrease the housing supply,” Fernandez explained. 

As a result, the housing supply decreased significantly because foreclosures were halted and recent buys increased during the peak of the pandemic. It caused rent to increase as well. To that point, Dr. Fernandez says most people have felt a shift in their everyday life.

“If you’re someone who gets up and you do your 8-5 every day or you’re in the beginning or middle of your career, you don’t feel it yet. You don’t see it yet. The only place where you have a sense of it is in your grocery store when you see that higher inflation,” said Dr. Fernandez.

The only way inflation will go down is if buyers aren’t chasing fewer goods in stores, Fernandez said. The people feeling the trends of an economy heading toward recession are people with risky assets; things like real estate, high-yield bonds, and currency.

He adds while these factors may feel like we’re in a recession; we are not—but the patterns of the current economy do point in that direction. The biggest sign of a recession is drastic changes in unemployment which the U.S. has not seen yet.