Nobel laureate economist Robert Shiller of Yale University warns that the global economy continues to seek solid footing, and economic signs don’t look promising.
“We’re in a puzzling economy,” Shiller told Bloomberg TV.
“This weak economy, it’s worldwide, and it might be a long-term malaise.”
He warns that home prices could tumble in the next few years despite a 5.1% increase in August.
“Well, I’m not surprised because we’re reporting the August numbers, it’s the end of the summer seasonal,” said Shiller. “If you look at seasonally adjusted [numbers], they’re just about flat, up one tenth of one percent for our 10 and 20 city index.”
“A year ago our Index was going up at a 10% rate, now it’s a five percent rate,” said Shiller.
“This is not the stock market, this is the housing market, and that suggests there might be a lowering, and possibly even declines in home prices in the next year or two.”
But others have a more optimistic view of the economy, both globally and domestically.
Business Insider recently cited 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
reported, 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.
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