Despite some economists warning that the American economy has slowed, Business Insider cites six reasons why the U.S. “is not doomed” to slide into a recession.
“While it's always good to be on guard, it seems that most of the evidence supports the argument that the economic expansion still has a ways to go,” Business Insider
reports, citing may economists’ bullish forecasts.
The half-dozen reasons to be optimistic from BMO Capital's Brian Belski:
- Long-term rates are higher than short-term rates. Recessions usually happen when the opposite is true;
- Manufacturing surveys continue to signal growth, but at a slower pace;
- Consumer confidence is still rising;
- Homebuilder sentiment is the most optimistic since 2005;
- Sales of autos and other big-ticket items are still rising;
- Weekly claims for unemployment insurance are at their lowest in 15 years.
"We believe a US recession remains years away," Goldman Sachs Asset Management wrote recently,
reflecting the broader consensus among those on Wall Street.
However, other experts are concerned about a global recession, which in turn could spark a U.S. economic downturn.
Citigroup economist Willem Buiter warns that the global economy is performing substantially below potential output, which he uses as the general benchmark for the idea of a global recession. With that in mind, he said the chances of a global recession in 2016 are growing, the Fiscal Times
"We think that the evidence suggests that the global output gap is negative and that the global economy is currently growing at a rate below global potential growth. The (negative) output gap is therefore widening," Buiter said in a note to clients.
He added, "from an output gap that was probably quite close to zero fairly recently, continued sub-par global growth is likely to put the global economy back into recession, if indeed the world ever fully emerged of the recession caused by the global financial crisis.
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