"It's A Historic Day": The US Economic Expansion Is Now The Second Longest On Record

In addition to bringing May Day which, as Deutsche Bank's Jim Reid describes as "the day people danced around a maypole in funny outfits and generally partake in outdoor celebratory activities but if yesterday was anything to go by in London anyone going outside was likely to need to dance just to prevent frost bite", the start of the new month marks a far more "historic" occasion: as we previewed three weeks ago, with the ticking over of the monthly calendar, this US economic expansion now becomes the outright second longest in history with data going back over 164 years and 34 business cycles.

According to Deutsche Bank's calculations, at 107 months the current expansion just nudged ahead of the long 1960s expansion, and will beat the 1990s expansion for the title of longest expansion in history if it extends past July next year.

What is notable is that as discussed before, the last four expansions (since the early 1980s) have all been long ones and are all in the top 6 longest of all time. Why have they been so long? According to Reid it’s largely due to demographics and globalization colliding.

The global labour force has naturally surged since 1980 with China deciding to integrate itself into the global economy at almost the same point. China thus dumped an additional billion of low paid labour on the world. This has helped structurally depress global wages for three and a half decades and meant that policy hasn’t needed to be tightened as early in the last four cycles as through most of history.

While these factors have helped prolong these business cycles, the risk is that we’re just past peak global labor now and therefore subsequent cycles will see wage pressures, clashing demographics, labor shortages, rising yields and general market instability. Which is why Deutsche closes on a pessimistic note: "So the days of super long business cycles may be over so enjoy this one while it lasts."

Or maybe not: as we also showed last month, according to the latest CBO forecast, the US is now expected to not have a recession any time until Dec. 31, 2028, which would imply that the CBO expects the current expansion to last no less than 234 months (since June 30, 2009), which would make it nearly 20 years long...

... and double the longest period without economic contraction in history, effectively unleashing an era of global peace and prosperity. Good luck with that.

Comments

666D Chess Tue, 05/01/2018 - 07:59 Permalink

Economic expansion? The only thing I see is debt expansion, propaganda expansion, criminality expansion, empty commercial premises expansion and homelessness expansion. I live in the UK but I'm pretty sure it's the same shit in the US. 

rejected Tue, 05/01/2018 - 08:19 Permalink

Joy! 

You complainers just don't know a good thing when you see it!

Edit:

"the US is now expected to not have a recession any time until Dec. 31, 2028"

No probs! Just recalculate with new and improved stats and the boom will continue for-eva!

 

Chief Joesph Tue, 05/01/2018 - 08:34 Permalink

This is absolute garbage.  Its the longest period of stagnation in U.S. history.  And, what are these cryptic parameters for determining expansion?  (They don't really say).  If they are basing it on how the Stock Markets are doing, that is the poorest indicator of determining expansion, because markets are always reactive to events, not predictive.  But, the American unemployment figures stand at 95 million out of the workforce, (highest at anytime since records were kept), trade deficits continue to grow, exports are down, GDP for manufacturing is struggling to make 7% without fudging the figures, when in the 1960's it was 34%, the dollar today is only worth 16 cents of a 1970 dollar, we have a nation debt of $21 trillion, as compared to $341 billion in 1970. Those are some of the true measures of how the economy is really doing.  So, where is the "economic expansion"? 

BankSurfyMan Tue, 05/01/2018 - 09:24 Permalink

Local employer will pay $16.00 an hour, local landlord charges $2,000 to rent an apartment. Economic expansion? Live in your van man! Rip out the seats in the back of the sedan. Expand and purchase a tent or sleeping bag! Life is good!

adr Tue, 05/01/2018 - 09:26 Permalink

Expanding stock multiples by issuing trillions in debt while under-reporting inflation by 8% or more resulting in average growth of less than 2% a year after massaging nearly all data to add to GDP including R&D that is already counted in sales IS NOT A FUCKING ECONOMIC EXPANSION!!!!!!!!

venturen Los Llanos Tue, 05/01/2018 - 10:10 Permalink

wrong? So unlimited debt is sustainable? Kind of like telling some in High School get their diploma, or heroin addict to stop....sure the first couple years are good....till those bad decisions....come back to haunt you. Tell is how the liberal 8 all democrat states are going to pay their bills....as they can't print money, Ca, NJ, Ct, etc

In reply to by Los Llanos

venturen Tue, 05/01/2018 - 10:07 Permalink

If only Rome or the British thought to print $100 Trillion of fake money....they would still be a world power....right. What an awful joke the economics of this time....this is like a new neighbor buying boats and fancy cars on credit....till bill comes due

Blankfuck Tue, 05/01/2018 - 11:18 Permalink

THE FEDERAL RESERVE BANKTARDS PRINTED ALL THAT PONZI TO MAKE THE 1% GREAT LEAVING THE DEBT OF TRILLIONS ON THE BACKS OF AMERICANS!

YET WE CANT JAIL THEM, ELIMINATE THEM, GO TO WAR WITH THEM!  THESE TERRORISTS, LEAVING THE AMERICAN PUBLIC DEEP IN DEBT SHOULD BE IN FROM OF THE FIRING SQUAD FOR TREASON. All  WEALTH REMOVED FROM THE BANKSTERS!

pitz Tue, 05/01/2018 - 13:50 Permalink

Goebbels would be proud at the propaganda machine that has invaded the contemporary American economy.  "long economic expansion", yet tent cities abound.  Good riddance, does anyone believe a word that is spoken or printed in the so-called "media" these days?