EC A New Year Brings New Recession Forecasts

The economic outlook is always uncertain, but one thing that doesn’t change is the constant stream of recession forecasts. Predicting a slump, in fact, has been a staple ever since the last downturn ended. Did the experience of being consistently wrong over the last seven years temper the obsession to see macro trouble at every turn? Apparently not. The business of assuming that a recession is lurking around the next corner for 2017 is in high gear.

The folks at Maudlin Economics last week, for example, warned that “there is concern over the chance of a cyclical recession in the US in 2017.”

Meanwhile, two economists at Ohio State University are anticipating the economy will soon slip over to the dark side. “My outlook for 2017 and beyond is that the US economy will likely see another recession,” Jay Zagorsky wrote on Monday. A colleague at Ohio State, Ian Sheldon, also sees trouble brewing via Donald Trump’s election, explaining that “he’s going to put the economy into recession.”

The election of a Republican generally—any Republican–is enough to inspire recession chatter. Last month, for instance, an analyst found a degree of cause and effect between presidents who hail from a political party that begins with the letter “R” and economic downturns. Joachim Fels, global economic advisor at Pimco, recently observed that “each of the six Republican presidents since the Second World War presided over a recession, and some more than one – there were three under Trump’s self-declared idol, Dwight ‘Ike’ Eisenhower, and two each under Richard Nixon and George W. Bush.”

Fels is hardly alone in worrying about a new recession because a new occupant of the Republican persuasion is set to move into the Oval Office. Johan Jooste, the Bank of Singapore’s chief investment officer, for instance, yesterday outlined his reasoning for thinking that US recession risk is on the rise due to President-elect Trump.

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Gary Anderson 4 years ago Contributor's comment

Edward Lambert's effective demand measurements and diminished tax receipts are two indicators showing possible recession within 3-6 months. Trump may or may not impact recession, and it could be positive or negative impacts.