Late last year my US recession probability indicator rose to 45%, suggesting the economy would come close to but just skirt a downturn (as defined by the National Bureau of Economic Research). <\/p>\n
Since then the credit crisis has intensified and soaring commodity prices have taken a further chunk out of real incomes. Most forecasters believe a recession has started and some expect it to be deep. Yet the data still leave room for debate. <\/p>\n
Available evidence suggests GDP may eke out a small gain in the first quarter. Based on February numbers released today, personal consumption should be flat at worst. Housing investment will again be a significant drag but should be neutralised by stronger net exports. Other capex is likely to be little changed and stockbuilding should be positive. Annualised growth of 1% or so does not look out of the question. <\/p>\n
A key reason for thinking a recession has started is a fall in private payrolls over the last three months. A further decline in March numbers released next Friday would be difficult to ignore but a rebound should not be ruled out. Weekly unemployment claims have yet to cross the 400,000 level to be expected in a serious labour market decline, while the excellent Trim Tabs point out that withheld tax receipts have picked up in recent weeks, suggesting conditions have at least stopped deteriorating. <\/p>\n
Remember that fiscal policy is set to be a significant positive for the economy from May, when tax rebate cheques start to be mailed out. <\/p>\n","protected":false},"excerpt":{"rendered":"
Late last year my US recession probability indicator rose to 45%, suggesting the economy would come close to but just skirt a downturn (as defined by the National Bureau of Economic Research). Since then the credit crisis has intensified and soaring commodity prices have taken a further chunk out of real incomes. Most forecasters believe […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2564","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2564","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2564"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2564\/revisions"}],"predecessor-version":[{"id":4873,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2564\/revisions\/4873"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2564"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2564"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2564"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}