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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: 4, Informative) by Alfred on Monday July 29 2019, @07:30PM (11 children)
(Score: 2) by JoeMerchant on Monday July 29 2019, @08:29PM (3 children)
And, does it matter, really? Can you compare the economy of 2005 to 1985 in any meaningful way? Or 1985 to 1965, or 1965 to 1945?
There's always something "gamechanging" that has happened in the last 20 years or so, at least since the 1850s in the US.
🌻🌻 [google.com]
(Score: 1, Informative) by Anonymous Coward on Monday July 29 2019, @09:26PM (1 child)
http://www.shadowstats.com/ [shadowstats.com]
(Score: 0) by Anonymous Coward on Tuesday July 30 2019, @10:21PM
Different AC, but if you are on there, don't forget their M3 measure. There is a reason why the Fed stopped publishing it, as it shows a different picture than what they want to claim is occuring.
(Score: 3, Funny) by All Your Lawn Are Belong To Us on Tuesday July 30 2019, @02:57PM
Well there was Springsteen, Madonna, way before Nirvana. There was U2, and Blondie, and music still on MTV. And the two kids in High School think that it's so uncool. Because we're preoccupied. With 19, 19..... 2005.
This sig for rent.
(Score: 2) by fliptop on Monday July 29 2019, @09:09PM (1 child)
This. The unemployment rate has long been considered a lagging indicator [investopedia.com].
Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.
(Score: 2) by FatPhil on Monday July 29 2019, @09:38PM
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 0) by Anonymous Coward on Monday July 29 2019, @09:11PM
Just look at the B.L.S. data. They don't change or abandon actual measures very often, just the preferred measures. So yes, they changed which "U" rate is "unemployment" and added "seasonal adjustment" to the figures, but the old ones are still there if you look. Same goes for inflation, money supply, confidence, and most others I can think of. Only those that are trade-dependent (think VPI or HOM) get changed all that often, but you really shouldn't use those for other reasons.
(Score: 2) by Runaway1956 on Monday July 29 2019, @11:50PM (3 children)
There is magic in numbers. If government can maintain the belief that unemployment is under 10%, the natives are content. Whatever lie it takes, government will maintain that http://www.shadowstats.com/alternate_data/unemployment-charts
(Score: 2) by Alfred on Tuesday July 30 2019, @01:59PM (2 children)
(Score: 3, Interesting) by Runaway1956 on Tuesday July 30 2019, @02:27PM (1 child)
I've not heard that one. But, if you're interested, the actual unemployment rate has been over 20% for quite a long while now. The chart seems to show it going over 20% very late 2008, or early 2009. I guess there may be some merit to that claim though. Young black males are hardest hit with unemployment - the statistics will bear that out, no matter where you go to find them. Especially in the inner cities, it seems that young black males are involved in more violent crime than anyone else. Out here in the rural areas, young white males seem to be marginally more violent than young black males. Damn the statistics on that one, that's just what I observe. So, yeah, maybe 25%, 30%, or 40% unemployment is conducive to violence. People with nothing to do generally go out to find something to do, even if it is self-destructive.
(Score: 2) by Alfred on Tuesday July 30 2019, @03:46PM