New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Is the U.S. Economy Facing a Recession? Insights for Penske Automotive Group Employees and Retirees

Healthcare Provider Update: Healthcare Provider for Penske Automotive Group Penske Automotive Group employees typically receive healthcare coverage through a variety of providers depending on their specific plan selections, with major national insurers like Kaiser Permanente, UnitedHealthcare, and Anthem BlueCross BlueShield being among the options available. The exact provider often varies by location and the specific plan chosen during open enrollment. Healthcare Cost Projections for 2026 The healthcare landscape is set for significant upheaval in 2026, with potential premium hikes expected to exceed 75% for many Affordable Care Act (ACA) marketplace enrollees, largely due to the expiration of enhanced federal subsidies. Penske Automotive Group employees, particularly those nearing retirement, may face steep increases in their healthcare costs as insurers respond to rising medical expenses and price inflation. With the ACA marketplace seeing some state requests for premium increases reaching as high as 66%, careful financial planning will be essential for employees heading into another challenging year in healthcare affordability. Click here to learn more

The question of whether the U.S. economy is heading into a recession has become one of the most closely watched debates of 2026. GDP growth slowed sharply to just 0.7% annualized in Q4 2025, the weakest quarter in years, and the labor market shed 92,000 jobs in February 2026, missing expectations significantly. ¹ Major forecasting firms now place recession probabilities between 30% and 49%, driven by tariff-related uncertainty, softening consumer spending, and a rising unemployment rate. ² Yet no recession has been officially declared. The National Bureau of Economic Research (NBER) has made no such determination, and early estimates for Q1 2026 suggest some economic stabilization.

For employees and retirees, understanding how a recession is officially measured, what the current data signals, and what it may mean for long-term retirement planning has rarely been more relevant.

Business Cycle Dating
U.S. recessions and expansions are officially measured and declared by the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), a private nonpartisan organization that began dating business cycles in 1929. The committee, which was formed in 1978, includes eight economists who specialize in macroeconomic and business cycle research. ³ Understanding the metrics for recessions and expansions is important context for employees and retirees evaluating their financial plans.

The NBER defines a recession as 'a significant decline in economic activity that is spread across the economy and lasts more than a few months.' The committee looks at the big picture and makes exceptions as appropriate. For example, the economic decline of March and April 2020 was so extreme that it was declared a recession even though it lasted only two months. ⁴

To determine peaks and troughs of economic activity, the NBER committee studies a range of monthly economic data, with special emphasis on six indicators: personal income, consumer spending, wholesale-retail sales, industrial production, and two measures of employment. Because official data is typically reported with a delay of a month or two -- and patterns may be clear only in hindsight -- it generally takes some time before the committee can identify a peak or trough. Some short recessions (including the 2020 downturn) were over by the time they were officially announced.

A Mixed Labor Market
The labor market -- long a pillar of economic strength -- sent its clearest warning signal yet in February 2026, when the U.S. economy shed 92,000 jobs, the first meaningful monthly decline since the COVID recovery era. The unemployment rate rose to 4.4%, up from a multi-decade low of 3.4% reached in April 2023 and the highest reading since early 2022. ⁸

In the 13 recessions since World War II (including the brief 2020 COVID recession), the unemployment rate has always risen, with a median increase of 3.5 percentage points. ¹¹ The current rise from 3.4% to 4.4% -- a 1.0 percentage point increase over 33 months -- is notable, though it remains well below recessionary norms. That said, direction matters: a prolonged upward trend in unemployment without a corresponding economic recovery is a pattern worth monitoring closely.

Slowing GDP Growth
The common shorthand definition of a recession is two consecutive quarters of negative real gross domestic product (GDP) growth -- a threshold that has not been met. However, growth has slowed dramatically: real GDP grew at just 0.7% annualized in Q4 2025, down from 4.4% in Q3 2025. ¹² GDPNow projects a partial rebound to approximately 1.9% for Q1 2026, but professional forecasters expect only 1.8% growth for the full year 2026 -- well below the long-run trend.

Since 1948, the U.S. economy has never experienced two consecutive quarters of negative GDP growth without the NBER declaring a recession -- though 2022 was an exception, as the NBER cited the unusually strong employment market. Whether 2026 requires a similar judgment call depends on how the data evolves over the coming months. ¹³

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The Tariff and Inflation Factor
The defining economic stress of 2026 is not a single shock but a combination of forces: tariff-driven cost increases, above-target inflation, and slowing growth. New tariffs represent the largest U.S. tax increase as a share of GDP since 1993, projecting an average household cost increase of approximately $1,500 per year and an additional 0.6% increase in consumer prices. ¹⁷ Business investment is projected to contract 6% due to trade policy uncertainty, and consumer spending growth is expected to slow to just 1.0% in 2026 -- a meaningful deceleration from recent years. ¹⁸ If that slowdown deepens, a recession becomes considerably more likely.

The Federal Reserve held its benchmark federal funds rate at 3.50%--3.75% at its March 2026 meeting, balancing inflation running above target (headline CPI at 2.67% year-over-year, core PCE at 3.06%) against a slowing economy. ¹⁹ The Fed may cut rates once or twice in the second half of 2026 if economic conditions warrant -- but with inflation still above the 2% target, its options are constrained.

No one has a crystal ball, and recession probabilities from major forecasters range widely -- Goldman Sachs puts the odds at 30%, JP Morgan at 35%, and Moody's Analytics at 49%. ²⁰ The NBER has not declared a recession, and a soft landing remains possible, particularly if trade tensions ease. If a mild downturn does arrive, it is worth remembering that recessions are generally short-lived, lasting an average of just 10 months since World War II. By contrast, economic expansions have lasted an average of more than five years. ²¹ To put it simply: The good times typically last longer than the bad.

Projections are based on current conditions, are subject to change, and may not come to pass.

1) U.S. Bureau of Labor Statistics, February 2026
2) Goldman Sachs Economic Research / JP Morgan Global Research, March 2026
3--5) National Bureau of Economic Research
6, 12, 15, 21) U.S. Bureau of Economic Analysis, Q4 2025 / Q1 2026
7) ISM Manufacturing PMI, March 2026
8--9, 17--18) U.S. Bureau of Labor Statistics, February 2026
10) Federal Reserve GDPNow / Atlanta Fed, March 2026
11) Wall Street Journal, February 2026
13--14) BEA / Yale Budget Lab, 2026
16) Moody's Analytics, March 2026
19) Federal Reserve Board, March 18, 2026
20) Goldman Sachs / JP Morgan / Moody's Analytics, March 2026

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Vesting: Vesting refers to an employee's right to receive benefits even if they leave Penske before retirement. Employees must meet specific requirements to become vested, and they can consult the Brief Plan Summary to fully understand their rights(Penske Cash Balance Pla…).

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Benefit Assurance: Benefits from the Penske Cash Balance Plan are paid from a trust fund established by the company and insured by the Pension Benefit Guaranty Corporation (PBGC). Employees can rely on the trust fund and the PBGC for benefit security, and should contact the Customer Contact Center if they have concerns about benefit estimates(Penske Cash Balance Pla…).

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Divorce and QDRO: In the event of a divorce, employees must obtain a Qualified Domestic Relations Order (QDRO) to divide their pension benefits. This court order ensures that the division is legally recognized, and employees should refer to plan procedures for guidance(Penske Cash Balance Pla…).

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Annuity Options: Penske offers various annuities, including life annuities and joint survivor annuities. Employees should assess these based on their personal needs and consult the company for recommendations regarding beneficiaries to ensure future payments are secure(Penske Cash Balance Pla…).

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