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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: 2) by RamiK on Monday July 29 2019, @09:07PM (7 children)
https://www.youtube.com/watch?v=TYeVQzTVyLk [youtube.com]
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(Score: 2) by FatPhil on Monday July 29 2019, @09:49PM (6 children)
All I know is that what Trump announced (well, gibbered about, to be more accurate) just today is the exact thing that gets inevitable recessions to kick off when all the other indicators are primed the way they are (e.g. private debt high, fed rates higher than you'd like them, and a boom in significant markets).
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 3, Interesting) by RamiK on Tuesday July 30 2019, @02:34PM (5 children)
I'm not saying it's crazy. I'm saying it's somewhere between magical thinking and inanely idiotic to argue for natural cyclicality without presenting a proper predictive model. We know it's coming. Specifically we know automation is going to create a lot of unemployment without raising productivity. It's obvious it's going to feed into a collapse of the consumer and housing markets. The problem is we're already hearing the same wealthy idiots from last time saying there's no need to take any action and you just have to wait it out.
Dumb. Unbelievably ignorant and dumb. Worse. This time it will be isolated to the US since China and India won't just let it happen. They'll subsidize everything. They'll relocate populations. They'll socialize even more of their education and medicine. For every moment the west hesitates, Asia will act. And by the time we realize it, we won't be able to regain the technological lead.
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(Score: 2) by FatPhil on Tuesday July 30 2019, @09:45PM (1 child)
At least I'm living in a country that's mostly sucked money from the EU to build core infrastructure (mechanical, technical, and social), and also realised that it wasn't an infinite teat, so if things go tits up we're better prepared than most.
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2) by RamiK on Wednesday July 31 2019, @08:57AM
FTFY
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(Score: 1) by khallow on Monday August 05 2019, @04:46AM (2 children)
We have centuries (though the present day) of automation that did the opposite - raised productivity massively and didn't create a lot of unemployment. So what changes that will be relevant? Why ignore centuries of valid history? I bet we've even had the "But this time it'll be different" speeches.
Asia will act, but you haven't mentioned a single way above that will create a technological lead. Instead, two of these will lead to technological backwardness (the subsidies and socialized medicine, possibly the population relocation too). In fact, a lot of the problems in the developed world happened because of poor, top-down thinking like this. After all, the developed world spends vast sums already on that technological lead. Yet we're getting your speech.
Conversely, if we pretend that you're on the mark, then it's an exercise in futility since the future will go to those who wholly embrace automation, not to those who merely "act" to protect obsolete human populations. As I noted in my journal, just because you play chess doesn't make you a grandmaster. Similarly, just because you occasionally think about such things doesn't mean that you are thinking well or accurately about them.
(Score: 2) by RamiK on Tuesday August 06 2019, @02:09PM (1 child)
Wrong. Whenever unemployment got too high we just started wars that killed off enough people and created enough property damage to "create jobs". Difference being is that since WW2 we got nukes so it's too risky to get done in worthwhile scale.
What is there to mention when it's happening as we speak? Intel has already fallen behind the Asian fabs due to the desktop and server markets just not generating enough compute demand for other parties to enter and compete against them. Now AMD can fab overseas and compete. 5G was lost over this as well. Pharmaceuticals... Automobiles... It's happening in every other tech market too. There's persistant market failures whichever way you turn and it's catching up to us.
Consider this: If we had this conversation a decade ago and I said in a decade Intel will be behind on fab, would you have believed it? Or would you have talked about "market demand" and "backwardness"? Don't let ideology fool you. China had massive year-by-year growth since the 70s and assuming it will stop any moment now just because it doesn't fit into our ideology is wishful thinking.
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(Score: 1) by khallow on Wednesday August 07 2019, @03:23AM
And the productivity improvement that you claim didn't exist continued to grow. It's not fitting the narrative.
Ok, that's one way it's not happening. Here, you're stating that Intel has a dominant market position because desktop and server markets aren't big enough?
While I grant that much of what you say is true (mostly aside from the ridiculous claim that somehow foreign competition qualifies as market failure), it's irrelevant to the claim that human labor will shortly be obsoleted, for the first time in history. At best, it's just evidence that less dysfunctional labor markets are taking business away from the more dysfunctional markets (which incidentally is evidence for normal market operation not a market failure). Sure, if we make all of human labor not worth employing, we can achieve your prediction. It just would be a dumb idea to do so.
I wouldn't be surprised particularly with the entry of China. Markets change over time. As to "not fitting into our ideology", I'm not having any such problems. Perhaps you should instead review why your ideology requires such things as productivity-neutral automation or war-dependent economic growth?