Latest WSJ poll puts US recession risk at 21%

20 June 2016, 17:30
Sherif Hasan

Which indicators are good at predicting recessions

Economists are horrible forecasters. It's so bad that the Fed's own James Bullard says they should quit altogether because the public is so-often sent the wrong signals.

The WSJ surveys economists monthly and the latest reading is 21%.

What bugs me is US economists using historical models to predict recessions. So many of them look at manufacturing. It's nonsense. The portion of manufacturing in the economy is miniscule compared to historical norms.

The worrisome sign for me is corporate profitability. Profits have been in negative territory year-over-year since late in 2015. Given the unwillingness to invest and muddling economy, I don't see how that trend will reverse.

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