Is this a recession or not? While it’s ‘not entirely clear,’ here’s what it could mean for American consumers

Americans are wondering if this is a recession or not.

A recession is defined by the National Bureau of Economic Research as a decline in economic activity that lasts more than a few months.

The gross domestic product report shows a contraction in the economy for the second straight quarter.

Personal Finance explains what the Fed's 75-basis point rate hike means for you.

President Biden and Federal Reserve Chair Powell both said that we are not in a recession yet.

Mark Hamrick is a senior economic analyst at Bankrate.com. The economy has been contracting for two quarters in a row.

He said it was not clear if a recession had begun because of the strength of the job market.

The economy is not out of the woods even if the NBER does not proclaim a recession.

The dangers of higher interest rates and inflation are growing.

Despite the country's economic standing, consumers are struggling in the face of sky-high prices, and almost half of Americans say they are falling deeper in debt.

There are certain things that haven't changed since the last downturn.

This is the first thing. There are signs that the labor market may be cooling off, which could make it harder to find a job.

While uncertainty is running high, hiring has slowed a bit.

Although the unemployment rate has remained just above the pre-pandemic low, Powell seems to be warning us that the job market will likely weaken in this higher interest rate environment.

Inflation remains at a 40-year high after the Fed raised its rates by 0.75 percentage points.

There are more headwinds that the markets face than tailwinds.

There are two Fears that the Fed could tip the economy into a recession has caused markets to slide for weeks.

Douglas Boneparth is the president of Bone Fide Wealth in New York. The markets are facing more challenges than they are benefiting from.

In times of turmoil, some advisors recommend sticking with short- to immediate-term fixed-income assets while shifting to stocks with high dividends.

Boneparth encourages clients to look for opportunities.

He said that good investors need to be able to buy on the way up but also on the way down.

He said that anyone with hindsight would have seen some of the biggest discounts in the capital markets.

There are three. Home price inflation won't fall, but they aren't rising as fast as they used to and a recession will likely cause the housing market to slow down.

Many would-be home buyers will have to pay a higher interest rate if the lending standards are tightened because it will be hard to get a loan. Channel said that a recession would make it harder for people to get a mortgage and buy a home.

He said this wouldn't be a "2007-2008-style crash"

Channel said that the housing market is in a better place than it was a decade ago. As long as you stay the course and keep making your payments, you will likely end up being okay.

The impact of a recession would be felt across the board, but each household would experience a different reaction.

According to Larry Harris, the former chief economist of the Securities and Exchange Commission, there are a few ways to prepare.

For consumers, here is his advice.

• Streamline your spending. “If they expect they will be forced to cut back, the sooner they do it, the better off they’ll be,” Harris said. That may mean cutting a few expenses now that you just want and really don’t need, such as the subscription services that you signed up for during the pandemic. If you don’t use it, lose it.
• Avoid variable rates. Most credit cards have a variable annual percentage rate, which means there’s a direct connection to the Fed’s benchmark, so anyone who carries a balance will see their interest charges jump with each move by the Fed. Homeowners with adjustable rate mortgages or home equity lines of credit, which are pegged to the prime rate, will also be affected.
  
  
  
  That makes this a particularly good time identify the loans you have outstanding and see if refinancing makes sense. “If there’s an opportunity to refinance into a fixed rate, do it now before rates rise further,” Harris said.
• Stash extra cash in Series I bonds. These inflation-protected assets, backed by the federal government, are nearly risk-free and pay a 9.62% annual rate through October, the highest yield on record.
  
  
  
  Although there are purchase limits and you can’t tap the money for at least one year, you’ll score a much better return than a savings account or a one-year certificate of deposit, which pays less than 1.5%.

You can also subscribe to CNBC on the internet.