Economic Commentary Published by Raymond James & Associates
Scott J. Brown, PH.D.
10/22/2019
A Field Guide to Recessions (updated)
There are few signs that the U.S. economy is currently in a recession. The odds of entering a recession within the next 12 months remain elevated, but are somewhat lower than they appeared in August.
Slower global growth and trade policy uncertainty have weakened business fixed investment. If sustained, this would eventually lead to weaker labor market conditions, dampening the growth of income and consumption.
The Federal Reserve’s cuts in short-term interest rates ought to help insure against downside risks in 2020. While the financial system is better positioned to withstand a recession, the ability to respond to a downturn is more limited than in the past.
Introduction:
The timing and severity of recessions is difficult to predict. They often depend on mass psychology. That is, if enough businesses and consumers expect a recession, then we may well have one. We are never “due” for a recession, but we know that downturns are inevitable. This Economic Brief covers the definition of “recessions,” how to tell if we are in one, and how to tell if one is coming.
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