2 comments on “Recession Watch

  1. Thank you for your thoughts!

    I’m curious, six weeks later, have you updated your probability of a recession in 2023?

  2. Markets over the past 3 weeks have swung from worrying about a strong economy pushing up real interest rates, to worrying about a slowdown that vaguely resembles a soft landing.

    So I’ve slightly increased my probability of a recession to 38%, but I see few signs that it will be a bad one.

    Note that the US economy was definitely not in a recession as of late May. Labor shortages still hamper the economy more than does unemployment. Delinquency rates are near record lows – they usually start rising a year before a recession. Industrial production set a new high in May. The ISM purchasing managers report says activity remained strong through mid June.

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