Is the United States already in a recession?
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There remains speculation around the actual state of the United States economy, with data signaling that a recession might already be underway. Analysis of data from the National Bureau of Economic Research (NBER) suggests that the economy could be in a downturn, a factor not acknowledged by relevant authorities, according to The Kobeissi Letter outlook shared in an X post on September 19. The platform noted that, historically, the NBER takes an average of 10 months to declare a recession after it begins officially. This delay means the economy is often profoundly affected when a recession is acknowledged. One notable example of this delay occurred after the COVID-19 pandemic in 2020 when the institution did not confirm a recession until 16 months later, even though the economy was declining. Similarly, during the 2008 financial crisis, the NBER took a whole year to declare a recession long after the economic damage had started to unfold. This pattern points to the possibility that the economy frequently experiences a downturn before it is officially recognized, which might be the case now. Recession and S&P 500 price index. Source: Real Investment Advice Stock market performance and recession announcement In this context, The Kobeissi Letter analysis was illustrated with data from Real Investment Advice, reflecting S&P 500 market performance versus NBER’s recession dating. The data indicated that there had been market declines before the formal announcement of a recession. For example, during the 2007–2008 crisis, the S&P 500 had already plummeted by over 50% before the recession was formally acknowledged. This delayed response is further highlighted by the fact that before 1979, there were no formal recession announcements, making it difficult to gauge the true timing of past downturns. Given the current state of the economy and the lag inherent in economic data releases —…
Filed under: News - @ September 20, 2024 6:22 pm