We’ve been in a recession for six months now.

That’s the early verdict from the Bureau of Economic Analysis. The BEA determined that GDP declined 0.9% between April and June. That follows a shrinkage of 1.6% in the first quarter, meaning we’ve had two consecutive quarters of economic contraction. This is an “advance” estimate, subject to the customary revisions.

The BEA is an agency within the U.S. Commerce Department tasked with providing official macroeconomic figures. It doesn’t make the final determination on whether the criteria for a recession have been met (that job falls to a panel of experts on the National Bureau of Economic Research). But this preliminary read on sliding second quarter output is telling nonetheless.

Things are rarely as simple as they seem. The “two-quarter” rule is more of a loose guideline. There is plenty of internal debate about whether or not we are in a downturn – let alone when it may have begun. Peaks and troughs within business cycles usually aren’t pinpointed until well after the fact. Still, regardless of whether it’s in nominal or real (inflation-adjusted) terms, the data is undeniable: the economy is decelerating.

The rest is just semantics.

That said, many of the usual hallmarks of a recession just aren’t there. At least not yet. For example, credit card delinquencies – which typically elevate in times of financial stress – remain near historic lows. And then there’s the labor market.

The economy added another 528,000 jobs last month, more than double the 250,000 that economists anticipated. Payroll expansion was particularly brisk in the leisure and hospitality sector, reaffirming one of my ongoing observations. While discretionary consumer spending has tightened (more on that in the upcoming issue), travel remains a top priority for many households.

Not only has unemployment retreated below pre-pandemic levels, but wages continue to rise, bolstering the argument for another three-quarter point rate hike at the next FOMC meeting.

As investors, all we can do is digest the data as it becomes available. Right now, the signs continue to point to a shallow recession rather than a deep and prolonged downturn. And such a scenario is already priced into the market.

While not discounting profit warnings from big box retailers, I will continue to selectively put new money to work and lock down some of today’s elevated yields over at my premium newsletter High-Yield Investing. In fact, if you’re looking for a reliable income-payer that’s delivered strong total returns that you can buy right now (or wait for a dip), then I have a suggestion for you…

Inflation Protection And Income

Brookfield Infrastructure Partners (NYSE: BIP) was specifically created to focus on the infrastructure niche. If you’ve ever dropped a dollar in a toll booth (like thousands of drivers in front of you and thousands more behind), then you can understand the appeal of owning these types of investments.

Infrastructure assets are often irreplaceable, low-maintenance, and recession-proof. They are also long-lived, protected by barriers to entry, and generate buckets of cash flow. Those are six of my favorite investment traits, all rolled into one.

BIP is one of the few pure-plays available to retail investors.

The company has built a global portfolio of entrenched assets on five continents… toll roads in Chile, shipping ports and railways in Australia, natural gas gathering and processing in Canada, wireless telecom in France and data centers in Brazil, just to name a few.

In a nutshell, BIP invests in infrastructure that helps transport energy, water, freight, passengers, and data. And it gets paid handsomely for its efforts. Funds from operations (FFO) have been growing at a healthy clip since 2009, totaling $1.7 billion last year. Distributions have been rising for twelve straight years, from $0.71 per unit in 2009 to $1.44 today. The most recent 6% increase elevates the yield to around 3.5%.

Management has a good eye for opportunistic purchases and has been investing aggressively over the past couple of years, most notably in the energy and data center fields. One transformative purchase was Genesee & Wyoming, a railroad operator with 16,000 miles of track that stretch across 41 states and parts of Canada.

It will join other new additions, including fiber optic lines and wireless communication infrastructure. These incoming assets are bearing fruit, helping to drive funds from operations (FFO) up 19% last quarter.

Action To Take

BIP has been, without question, one of the market’s best performers over the past decade – delivering average annual returns of 20%. And it’s only getting stronger. What’s more, since most of BIP’s assets are in heavily-regulated industries, their long-term contracts have built-in inflationary clauses.

Thanks to the steady, fee-earning nature of infrastructure assets, this low-maintenance stock can be held with confidence for years to come.

In the meantime, if you’re looking for more picks like this (with even higher yields), then consider checking out my latest research…

Each one of the stocks in my latest report pay market-crushing yields… All of them have proven track records… And are some of the strongest, most reliable, and generous income payers I’ve ever seen…

You won’t hear about investments like this in the mainstream financial media. But in a market that where the average S&P 500 stock yields less than 2%, you owe it to yourself to earn more.

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