US Expansion To Continue In 2020, No Recession... Unless


1. Recap of US Economic Growth in Recent Years

2. Slower US Economic Growth Expected in 2020

3. Given Aging Business Cycle, Is Recession Inevitable?



With the year-end upon us, we are showered with economic and market forecasts for the New Year, as usual. Most of the forecasters I read expect the US economic expansion to continue next year, although many expect growth to continue to slow somewhat. Some I respect even predict the current unprecedented expansion will continue in 2021, thus further adding to the longest economic recovery ever recorded.

Most of the analysts I read also predict that the US economy will avoid a recession next year and maybe even in 2021. But such forecasts also come with some caveats, as you would expect. The two most common caveats are: 1) An escalation of President Trump’s trade war with China and others; and 2) The possible election of ultra-liberals such as Bernie Sanders or Elizabeth Warren to the White House in the November elections next year.

Likewise, most of the people I read believe the current bull market in stocks will continue next year and maybe even into 2021. While the gloom-and-doom crowd of forecasters always believes that a recession and financial crisis are just around the corner, most of the writers I read regularly think the stock market has the potential to continue on the upside next year and perhaps longer, depending on the caveats noted above.

So, today we’ll peer into the economic and market outlook for the New Year based on the forecasts I read, and I’ll add some of my own thoughts and concerns as we go along. One of those concerns is the fact that we are already in the longest economic expansion in history, as well as the longest stock bull market in history, and it is impossible to know in advance when they will come to an end. We are in uncharted waters.

As the old saying goes, “They don’t ring a bell at market tops or bottoms,” so we never know when they will happen. This argues for having some investments in your portfolio that have the potential to do well regardless of whether the markets and the economy go up or down.