by Bill McBride on 10/13/2016 11:33:00 AM
Thursday, October 13, 2016
The WSJ surveyed 59 "academic, business and financial economists" about the possibility of a recession in the next four years: Economists Believe a Recession Is Likely Within Next Four Years
The U.S. must face one of two scenarios: Either the next president will face a recession in office, or the U.S. will have the longest economic expansion in its history.Four years seems like forever and I usually only forecast out a year or a little more.
... Economists in The Wall Street Journal’s latest monthly survey of economists put the odds of the next downturn happening within the next four years at nearly 60%.
That is ... a recognition that throughout its history the American economy has never grown for more than a decade without a recession. Over the course of the next four years, something—whether exhaustion of the economy’s cyclical momentum, a policy mistake from the Federal Reserve or some outside shock—could knock the economy off course.
“We do not think expansions die of ‘old age’ but there’s more probability that a shock will hit the U.S. economy further out in the horizon,” said Lewis Alexander, chief U.S. economist at investment bank Nomura.
Looking back to 2005, I argued the housing bubble - and coming bust - would probably take the economy into recession. However it wasn't until January 2007 that I predicted a recession (and the recession started in December 2007).
That was a pretty obvious reason for a recession, and it took almost two years after the housing bust started for the recession to materialize. I don't currently see anything that will cause a recession.
I don't know about the odds in the next four years, but I doubt there will be a recession in 2017 (and 2018 seems unlikely too - but that is still a long time from now).
Posted by Bill McBride on 10/13/2016 11:33:00 AM