October 16, 2019 0

Economists predict another US recession by 2020


THAT BUT AN ICONIC FASHION NAME, KATE SPADE AT 55 IS DEAD.>>>MEANTIME ECONOMISTS ARE LOOKING AT THE ECONOMY SAYING THIS CAN’T GO ON VERY LONG, THAT IS THIS RECOVERY THAT SEEMS NO BOUND OF THE BY 2020 THE VIEW OF THESE ECONOMISTS IT END. THAT WILL BE YEAR OF RECESSION. IF SO, LONGEST STRETCH WE’VE SEEN IN POSTWAR ENVIRONMENT WITHOUT A SLUMP OR RECESSION OR TWO BACK-TO-BACK QUARTERS OF CONTRACTION. NATIONAL ASSOCIATION FOR BUSINESS ECONOMISTS SURVEY ANALYST JACK KLEIN. JACK, VERY GOOD TO HAVE YOU. WHAT DOES THIS MEAN, JACK? THEY’RE SAYING BY 2020 YOU COULD MAKE A CASE, CERTAINLY BY THEN THAT IS A GOOD POSSIBILITY BUT WHAT ARE THEY BASING IT ON?>>I THINK IT’S A POSSIBILITY AND IT IS THE BEST GUESS WE HAVE THAT BY END OF 2019 OR EARLY 2020 THAT THERE IS A GOOD POSSIBILITY THAT WE MIGHT SEE THE END. OF COURSE WE ARE BEGINNING THE SECOND LONGEST EXPANSION RIGHT NOW AS WE GET INTO 2018. THE GROWTH RATE WE’RE SEEING FOR 2017 IS NOT A BAD PACE. CERTAINLY AT ABOUT 2.8% FOR THIS YEAR AND 2.7% FOR 2019. WE NEED TO RECOGNIZE THAT THE ECONOMY IS FUNCTIONING FAIRLY WELL. NEIL: YOU COULD MAKE THE ARGUMENT THINGS ARE PICKING UP A LITTLE BIT. ONE QUARTER DOES NOT A TREND MAKE. NEIL: WE’VE SEEN TRENDS, ALL OF SUDDEN EMPLOYMENT REPORT, INCLUDING THOSE AT THE ATLANTA FED SAYING WE COULD SEE 4 1/2% CLIP ACTIVITY. FIRST OF ALL, DO YOU SEE THAT? DOES THAT TYPE OF DATA PUSH THIS DOOMSDAY SCENARIO BACK A BIT?>>I THINK THERE IS DATA IN THE SURVEY THAT SUGGESTS IT COULD PUSH THINGS BACK. INDUSTRIAL PRODUCTION SENTIMENT AT 20182.83% WHICH WE HAVEN’T SEEN IN SOME SOMETIME AND INVESTMENT IN NON-RESIDENTIAL EXPENDITURES AND CAPITAL X, IS VERY STRONG, 5.8%. THAT COULD CARRY US ALONG. DON’T FORGET THE DRIVER OF THE ECONOMY CONTINUES TO BE THE CONSUMER. WE SAW IN THE SURVEY SUGGESTS THAT WE HAVE 2.6% GROWTH RATE IN CONSUMER SPENDING IF 2018. IT IS A LITTLE BEHIND WHERE WE SAY THREE MONTHS AGO, THAT HAS TO REFLECT WE HAD A SOFTER FIRST QUARTER. I THINK AS WE LOOK AT SORT OF A NUMBER OF FACTORS AND LOOK AT SOME OF THE DATA THAT CAME OUT LAST WEEK, NEIL, FOR INSTANCE, CONSTRUCTION SPENDING WAS UP. WE HAD VERY GOOD, THE DATA ON RETAIL SPENDING EARLIER IN THE MONTH. WE THINK ABOUT THE DATA ON MANUFACTURING LOOKS FAIRLY GOOD. SO I THINK THERE IS A NUMBER OF METRICS OUT THERE THAT REALLY KIND OF SUPPORT THE UNDERPINNINGS OF THE SURVEY. NEIL: YOU KNOW, JACK, IT IS ALWAYS DANGEROUS FOR ME TO SAY IT IS DIFFERENT THIS TIME BECAUSE PEOPLE ALWAYS REGRET SAYING THAT BUT THE NOTE ON THIS RECOVERY WAS MAYBE GIVEN THE SEVERE RECESSION PRECEDED IT, IT WAS SLOW. IT WAS STEADY. IT WAS RESPECTABLE. IT WASN’T GANGBUSTERS THOUGH. BECAUSE IT WAS SUCH A TEPID RECOVERY, IT HAD LONGER LEGS. AND THAT 2020 THING COULD BE OFF, MAYBE BY YEARS. WHAT DO YOU THINK?>>YEAH. IT IS VERY POSSIBLE. I MEAN, AGAIN, IT IS A PROBABILITY FUNCTION FOR US. NEIL: SURE.>>IT IS OUR BEST GUESS WHEN THIS COULD HAPPEN. WE NEED TO NOTICE IN THE SURVEY THERE ARE SOME RISKS AS WE LOOK OUT OVER THE NEXT YEAR-AND-A-HALF. CERTAINLY TRADE POLICY IS ONE OF THEM. WE SEE THAT WE’RE WALKING UP INTEREST RATES. INFLATION IS A LITTLE BIT HIGHER AS WE GO FORWARD. SO ALL OF THESE FACTORS ARE CERTAINLY ENTERING INTO OUR PERCEPTION OF HOW THE ECONOMY IS GOING TO PERFORM. BUT I THINK, YOU KNOW, IT’S NOT 100% PROBABILITY. IT IS A MEDIAN ESTIMATE OF WHAT WE THINK IS BEST EXPECTED AND IT COULD BE PUSHED BACK AS YOU’RE SAYING, NEIL. I WOULD ARGUE THAT IS A GOOD IDEA TO THINK ABOUT IT IN THAT FASHION. NEIL: THANK YOU VERY, VERY MUCH, JACK. THANK YOU FOR TAKING THE TIME. NATIONAL ASSOCIATION FOR

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