Are We Talking Ourselves Into A Recession?


1. Overview – Are We Really Headed Into A Recession?

2. Strongest Economic Growth In Decades – What Changed?

3. Consumers Are As Pessimistic Today As I Have Seen Them

4. Nearly 70% Of Economists & 60% Of CEOs Predict Recession

5. Will Falling Confidence Lead To Decreased Spending?

Overview – Are We Really Headed Into A Recession?

As I have indicated in recent weeks, I don’t really understand why the media has turned so bearish on the US economy lately, and why so many forecasters are predicting we’re either just about to enter a potentially nasty recession or we’re already in one. But they are, and they’ve done a darned good job of convincing American consumers that a recession is upon us. Even the latest survey of CEOs shows a majority expect a recession next year, as I will discuss below.

I understand we’ve seen some negative developments in the economy this year such as inflation soaring to 40-year highs and a Fed which is likely to raise interest rates several times just ahead to fight it. And I understand measures of consumer confidence and sentiment have declined sharply in the last few months. Obviously, these developments don’t bode well for the economy or stocks which have plunged over 20% in the last few months.

Yet I’m still not convinced a recession is inevitable just ahead or we’re in one already as some forecasters are warning. Do I think a recession is coming? Certainly at some point, but maybe not until next year in my view. I could be wrong, of course. For example, if the Commerce Department’s first estimate of 2Q GDP comes in negative at the end of July, then whamo – we are already in a recession and I’ll be the first to admit I was wrong.