Recession - 23.6% Chance Within Next Year

Recession - Report Updates

Initially, after the government shutdown ended, the BEA came out with release dates for a few unimportant economic reports from Q3. 

On Wednesday, the release dates of the reports we care about were announced. The “initial” Q4 GDP report will come out on February 28th. It will take the place of the initial report and the first update. Essentially, it’s a combination of the 2 reports. The December U.S. Trade in Goods and Services report will be released on March 6th. 

Finally, the December Personal Income and Outlays report and the Personal Income data for January will be released on March 1st.

Recession - Shutdown Part 2 Might Be Coming

The bad news is this new schedule could be meaningless if the government shuts down again. Deadline for a shutdown is February 15th. 

If the next shutdown lasts a few weeks, these reports will be delayed again. Initial Q4 GDP estimate and the first revision could end up being combined with the second revision. 

The latest negative headline on the potential for a government shutdown came from Vice President Pence. He said the last shutdown wasn’t a mistake and he can’t guarantee there won’t be another one.

I’m very certain a deal won’t be made more than a couple days before the deadline. These deals usually go close to the deadline. Since the debate is the same as the one that caused the last shutdown and the players are the same, I can’t see a deal being made easily. 

The shutdown won’t affect stocks and will have a temporary impact on the economy. But it will make it tougher to gauge the direction of the economy because reports will be delayed again.

Recession - Percentage Of Yield Curve Inversions Push Up Recession Risk

As you can see from the chart below, 36% of the yield curve is inverted. 

Since 1999, this percentage threshold has been reached 3 times. Two of these times the economy entered a recession soon after. It’s possible the difference between the 30-yield and 3-month yield as well as the difference between the 10-year yield and the 2-year yield have already troughed. 

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