Denizen
Gold Member
- Oct 23, 2018
- 4,837
- 1,062
- 190
- Banned
- #1
Factory output is flashing red;
Ford and Tesla announced falling revenue. Boeing is flying backward.
In the Trump era down is up, backward is forward, and illegal is legal.
Donald Trump is asleep at the wheel.
In the Trump era its ok to not be ok. Trumpstorm of bad news.
https://www.washingtonpost.com/busi...e-hit-compensate-max-customers/?noredirect=on
Tesla falls after posting wider-than-expected loss
PayPal stumbles 6% after missing on revenue, slashing full-year outlook
Is the US already in a recession? This economist thinks it's possible
Ford and Tesla announced falling revenue. Boeing is flying backward.
In the Trump era down is up, backward is forward, and illegal is legal.
Donald Trump is asleep at the wheel.
In the Trump era its ok to not be ok. Trumpstorm of bad news.
https://www.washingtonpost.com/busi...e-hit-compensate-max-customers/?noredirect=on
Tesla falls after posting wider-than-expected loss
PayPal stumbles 6% after missing on revenue, slashing full-year outlook
Is the US already in a recession? This economist thinks it's possible
Is the US already in a recession? This economist thinks it's possible
Paul Davidson, USA TODAY Published 3:35 p.m. ET June 25, 2019 | Updated 4:28 p.m. ET June 26, 2019
CLOSE
Although the American economy may look recovered on paper, some made drastic decisions during the recession and are still digging out from deep hole. USA TODAY
Economists are increasingly forecasting a recession next year, but one believes the downturn has already begun.
Gary Shilling, an economist and financial analyst who is credited with predicting several recessions over the past 40 years, thinks the U.S. is in a relatively mild slump.
āI think weāre probably already in a recession but I think it will probably be a run-of-the-mill affair, which means real GDP would decline 1.5% to 2%, not the 3.5% to 4% you had in the very serious recessions,ā Shilling, president of economic and financial research firm A. Shilling & Co., said in a recent interview broadcast this week by Real Vision.
In such a tempered slide, he says, āStocks probably wouldnāt fallā but if they did, they likely would tumble about 22% ā similar to other recent recessions. That, he says, would take the Standard and Poorās 500 index about 200 points below itās Christmas Eve nadir of 2,351.
His view is at odds with the vast majority of economists who expect the economy to grow a solid 2% to 2.5% this year after expanding at about a 3% clip last year and in the first quarter.
Factory output has declined recently
Factory output has declined recently (Photo: Getty Images)
Shilling points to:
ā¢ Declining industrial production, a result of a weak global economy and the Trump administrationās trade war with China.
ā¢ Feeble job growth of 75,000 in May, along with downward revisions to prior months.
ā¢ The Federal Reserve Bank of New Yorkās recession probability chart, which shows about a 30% chance of a downturn the next 12 months, up from about 10% early this year. That data is based on an inversion of the yield curve, which has shown rates on 3-month Treasury bonds topping 10-year notes recently ā a sign that investors donāt have much faith in the longer-term outlook. Inversions do herald recessions but often two years in advance.
ā¢ The Organization for Economic Co-operation and Developmentās leading economic indicators, which has edged down since last year.
ā¢ Shilling also cites weak housing data, though he notes falling mortgage rates have bolstered home sales in recent months.
Jim OāSullivan, chief U.S. economist of High Frequency Economics, agrees that falling industrial output is worrisome. But while job growth has slowed substantially from last year, he chalks up Mayās 75,000 payroll advance to normal volatility. He says itās typically an outright drop in employment that foreshadows recession, not a slowing.
More significantly, OāSullivan notes that initial jobless claims ā a gauge of layoffs and perhaps the most reliable real-time recession indicator ā have remained near 40-year lows.
Newsletters
The National Bureau of Economic Research typically calls recessions based on industrial production, employment, retail sales and personal income. Noting that only factory output is flashing red, OāSullivan says, āA realistic assessment of the evidence is that we are not currently in recession.ā
Still, he adds, āThereās clearly a case for some slowingā in the economy. And it wonāt be known definitively if the U.S. is in recession for many months.
āThey generally donāt call recessions until well after they start,ā he says.
Last edited: