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A Recession Is Coming (Eventually). Here's Where You'll See It First:
Last week's report on second-quarter gross domestic product showed that the economy slowed last spring. It also came exactly 10 years since the Great Recession ended, making this officially the longest expansion in American history. (Well, probably. More on that in a second.) So perhaps it's no surprise that forecasters, investors and ordinary people are increasingly asking when the next downturn will arrive.
Economists often say that "expansions don't die of old age." That is, recessions are like coin flips — just because you get heads five times in a row doesn't mean your next flip is more likely to come up tails.
Still, another recession will come eventually. Fortunately, economic expansions, unlike coin-flip streaks, usually provide some hints about when they are nearing their end — if you know where to look. Below is a guide to some of the indicators that have historically done the best job of sounding the alarm.
[...] One caveat: Economists are notoriously terrible at forecasting recessions, especially more than a few months in advance. In fact, it's possible (though unlikely) that a recession has already begun, and we just don't know it yet.
"Historically, the best that forecasters have been able to do consistently is recognize that we're in a recession once we're in one," said Tara Sinclair, an economist at George Washington University. "The dream of an early warning system is still a dream that we're working on."
The article goes on to list and expand upon these indicators which are:
1: The Unemployment Rate
2: The Yield Curve
3: The ISM Manufacturing Index
4: Consumer Sentiment
5: Choose Your Favorite
Do you think the US economy is on the verge of a recession? What have you done, if anything, in preparation for the eventual downturn?
(Score: 0) by Anonymous Coward on Monday July 29 2019, @07:20PM (2 children)
I think we're overdue for one, but we've been pushing the day of reckoning out indefinitely by the modern Western policy of cheap money and penalizing savings. Only when safer alternatives will be preferable to dumping the money in index funds will we see a stampede out of stocks.
If that happens this or next year, Trump can forget about getting reelected. So he will try to get the Fed to keep rates low, perhaps even offer negative savings rates like in Europe. Until recently, the Fed was tending away from such a policy, but Trump can be very persuasive and manipulative.
After 2020 though, nobody cares what happens.
(Score: 4, Insightful) by Runaway1956 on Monday July 29 2019, @11:47PM (1 child)
Trump doesn't control the Fed any more than any other president. The Fed does what the big bankers want, and nothing more. Big banking wants to see less regulation, so if they can support Trump, they will do so. But, no, that doesn't mean Trump controls the Fed - it only means that Trump is a useful tool from the banking perspective.
(Score: 3, Insightful) by PartTimeZombie on Tuesday July 30 2019, @03:10AM
Oh gods, at last someone here gets it.
The constant "but the Democrats!!!" nonsense here was starting to get me down.
It is almost as if they have forgotten how Mr. Obama went through with Mr. Bush's bailout package for the banks the last time they crashed the economy.