IS THE NEXT RECESSION ALREADY HERE? Some analysts are arguing that the next recession is already here. Could that be true despite all of the strong economic data being pushed in the media every day? If so, does it matter, and what should investors be doing about it?
Are We In A Recession? Some analysts are saying that they believe we are already in a recession. They specifically point to a dive in consumer sentiment as a leading indicator of this. With most data lagging, and being published at least a quarter after the fact, they could well be right. Most investors won’t realize it until they are months behind the curve. Others might argue that job numbers, consumer spending stats, and economic growth levels support the opposite view. Though we also need to be smart enough to understand how these numbers are manipulated and temporarily artificially boosted. For example, real unemployment may be 4x higher than reported in some cities. A September burst in consumer spending figures could mostly be due to higher revenue on inflated prices, as well as panic shopping, fearing holiday shortages and hoarding. That is money that probably won’t be spent again in the next three months. Stimulus is also floating