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Economists Finally Admit, Odds Of A US Recession Are On The Rise
As the evidence, that the US economy is either in or near a recession, mounts (confirmed by a new cycle high in inventories-to-sales just today), it appears even the most ardent optimists are admitting the odds of a US recession are on the rise. As Bloomberg reports, for the first time in 14 months, economists year-ahead recession probability estimates rose (to their highest level in 2 years).
Whether it is the "facts"...
Such as all 6 regional Fed surveys flashing red...
Or admissions by The Fed that everything is not awesome...
"Although U.S. economic data releases generally met market expectations, domestic financial conditions tightened modestly as concerns about prospects for global economic growth, centered on China, prompted an increase in financial market volatility and a deterioration in risk sentiment during the intermeeting period," Fed officials said in the minutes of their Sept. 16-17 gathering, released Thursday
Bloomberg reports that he probability that the world's biggest economy will enter a recession in the next 12 months jumped to 15 percent, its highest level since October 2013, according to economists surveyed Oct. 2-7 by Bloomberg.
The median had held at 10 percent for 13 consecutive months.
Concerns over China, and the potential spillover to other economies, have led economists to cut their third-quarter growth forecasts to 2 percent from as high as 3 percent in July. China also is worrying Fed officials, who cited it as a risk to their outlook for economic growth and inflation — so much so that they delayed what would have been the first increase in the benchmark interest rate since 2006.
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However, do not get your hopes up that "economists" have seen the light of reality, as Bloomberg notes:
In a separate survey, economists projected the U.S. won't enter a recession until 2019, after pegging it to 2018 in last month's survey.
And finally, to "guarantee" a US recession...
“The idea that the U.S. will go from a growth rate of 3.9%, as it was in the last quarter to two quarters of negative growth, is far-fetched,” says IMF chief economist Maurice Obstfeld in interview on Bloomberg TV. A 15% chance of a U.S. recession next year would be “high by my reckoning”
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Please - the US is in recession right now if you use accurate inflation data
Just look at how we fix inflation:
Chapwood Index shows real inflation in US.
In 2014, it was 9.7% - 1212% of official US inflation (0.8%)
http://www.chapwoodindex.com/
The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation.
You just have to keep whacking a mule between the eyes with a 2x4 till they notice you. Things are bad enough that the economists are looking up from their magic models and noticing things really suck. I expect a whole new slew of bad idea's to be forthcoming shortly.....
amen. too true.
Any one who believes "economists" or indeed any "expert" trotted out by the lying media deserves what they get...ignorance and a world view as if it was reflected from a fun house mirror.
All my life the lie-stream media/government complex has countered the voices of those pointing out an obvious US recession with the mantra 'there is no recession' for 18 months to 2 years and then turned 180 degrees with the follow up of ''t appears there was a recession...which is now over' which is run for a day or two by the same news outlets and then never mentioned again.
Do these pansy-ass, sheltered ivory-tower idiots EVER stop to think that their measuring "tools," assumptions, models, and resulting data might be WRONG?
Silly me. Why should they ever be expected to look at actual hard reality?
Perish the thought. Let the economy and the productive workers perish too.
I wonder how long it will be before Chapwood is muzzled like Eagan Jones was.
DavidC
If wholesale inventory to sales are at cycle highs, aren't we almost at the peak of the recesssion?
It's only a high when it stops going up and it only stops going up when the bankruptcy's start.......
Recession? More like real depression.
Truth !!
A real unemployment of about 30% says you're right.
Stepping out on a ledge here....
90% to 100% Odds of a Depression
there,I said it.....
3.9% growth rate what a crock, maybe 3.9% due to under reported inflation numbers and Obozo care insurance and drug price hikes.
our business has cratered here in flyover.
we have placed technicians on a four day week. we may stop being open on Saturday.
our phones are totally dead. our distributors have reduced staff to one and the lights in the warehouse are turned off. it isn't just us.
we operate in a very basic and needed auto sector. you can't get a license without making sure you have one in your car.
economy is going down the tubes fast.
not a pleasant place to be
I know the feeling we sell used items on Ebay and business has been slowing way down these past couple of months.
Breathalyzer Interlocks? You know times are hard when Bubba can't afford to get drunk enough for his 5th DUI.
economy is going down the tubes fast
I agree, they have propped this thing up for about as long as they can. Our sales are still 20% lower than 07, and we have had to lower our margins to boot. Most small businesses are not even pretending to see future growth, they are hoping they can survive and that a competitor goes under. There used to be enough business to go around, now at least 2 of the 5 businesses like ours needs to go. No one has the money or cash flow to buy the others out. Mergers are out because of control issues. Hard headed Hillbillies started their own businesses cause they didn't want a boss
I've been watching these people for years. It's always the same story from highly-paid economists. "We will keep watching the data, we will keep watching the data!". And by the time that these "gurus" decide that an economic slowdown exists - the country has already been in a Recession for 12 months!!
It's time to fire all of these people. Their contribution to the US financial system is ZERO!
A bit like a number of these investment gurus who say buy when the move has happened or sell when the stock or whatever is already in the toilet.
DavidC
Their contribution to the World financial system is ZERO!
;)
The trick for these folks to time their recession call (so they can later claim to be accurate) to when we're already pulling out of it so there's never any report of actually being IN a recession. Of course when you are in the beginnings of the Mother of All Depressions - you have to keep extending that call f. . . o. . . r. . . e . . . v. . . e. . . r . . .
Nice cherry-picking of data Professor Obstfeld.
The Bullingdon boys are throwing in the towel !
When Eton and Rugby forget their catechism based on stiff upper lip and cold showers.
Rudyard K will have to rewrite KIM by adding a surname to it like PHILBY !
Begads!
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=25Xp
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=25Xi
A couple of charts for the ZH geeksters. Austrian TMS (US$ adjusted) velocity and acceleration to private GDP vs. real final sales: recession as of late 2014 to earlier this year, as in 2008, 2001, and the early 1980s.
Deflationary conditions.
A potential implication is that the Fed will have to print, and the US gov't incrementally borrow and spend, an additional $2.5-$3 trillion during the next recessionary cycle over the next 2-3 or more years.
This is consistent with the debt-deflationary regime of the Long Wave and where Japan was in the early 2000s and the US in the late 1930s.
Tylers, feel free to use these charts if you like, or if you dare. :-)
Once borrowing costs rise for all these high yield companies who have had record access to the HY bond market these last six years, you'll start to see unemployment shoot way up as the layoffs accelerate to prevent defaults. At that point, it'll be undeniable.
The only time in the last (at least) 8 years we've been OUT of a recession is when we were in a depression and I'm not convinced we aren't STILL in a depression.
Comment from a radical right wing extremeist idiotic stupid TEA party bagger guy to this revalation from the top economists that promote more and more fiat creation as a solution.......
WELL DUHHHHHHH. Racing toward the great reset.
This post is eqivalent to a guy whispering to you to "be careful, there are mountain lions in the area" as the mountain lion is eating you!