A recession can send stocks, retail sales, and home prices tumbling.
Already the U.S. is seeing the worst housing slump in a quarter century. The economy lost 17,000 jobs in January, the first drop in more than four years. In 2007, the year ended with unemployment higher in 74 of Kentucky's 128 counties.
The state's gearing up for a leaner budget and a 900-million dollar shortfall. Those numbers and a lot of other ones are how UK's Ken Troskey gages Kentucky's economic well-being.
"The probability of Kentucky experiencing a recession is somewhat lower than the country as a whole," Troskey says.
Troskey says being a big export state also helps.
From cars to Bourbon to horses, we produce and sell things people around the world want to buy.
"We're the 18th largest exporting state, and the dollar has been dropping; and when that happens, it increases the amount of goods exported overseas."
Cutbacks are a reality even in Fayette county which along with Woodford county is home to the state's lowest unemployment rate.
Chase Bank plans to layoff 430 people this summer. The state's budget woes might mean Lexington's largest employer UK might have to do the same. But don't assume the classifieds and job sites are empty.
"If we continue to see increases in exports. That's manufacturing we're talking about so that may be an area,"Troskey says.
But if the economy tanks, buyers don't come knocking, and global competition becomes more fierce, Troskey says the long term prognosis for manufacturing won't be all that great.
"Some of our biggest sectors is the health care sector. That's still a sector that I think is expanding in Kentucky."
And that growth isn't just in the short term. Of the four fastest-growing fields in the Bluegrass, all but one is health related.
By 2014, openings for medical assistants and physician assistants will increase by 39% each. There will also be 47% more jobs for home health aides. In fact, some sort of health care job is among the fastest growing in every region of central and eastern Kentucky.
"I don't think we should be running scared."
It seems as we all live longer, the business of staying healthy gets stronger, regardless of the economy's health. And just like having health insurance, making sure you're ready for whatever comes your way is good advice.
"You should always be prepared if something happens. You should always have a reserve fund that so if you do have to find another job, you have the financial resources to do so."