On May 17, CNBC had an article titled “Goldman’s Hatzius: The Next US Recession Is ‘Years Away’”
“There’s still a long way to go. The unemployment rate is still 9 percent, we’re nowhere close to a really tight labor market that usually predicates a recession, so I think we’re still be in a recovery for a few years,” Jan Hatzius told CNBC Tuesday,
“The underlying trend is still above-trend growth. That’s not going to be true in every indicator, but the best evidence for that is probably the fact that the unemployment been trending down, Hatzius said.
This view, that a recession is “years away,” seems to be widely held among economists and other professional forecasters. Last week I posted three sets of forecasts, each indicating sustained economic growth for years, as well as other favorable accompanying conditions such as low inflation. Also of note is that various long-term government projections forecast the same trends.
Very little is seen in these various forecasts that would indicate the possibility of recession, or worse. In fact, in the Philadelphia Fed Survey Of Professional Forecasters, which I featured in the May 18 post, the following was indicated:
As for “the chance of a contraction in real GDP in any of the next four quarters,” estimates range from 7-12.2% for each of the quarters through Q2 2012.
Will these economic forecasts prove accurate? While it may be pleasant to think that we will be experiencing economic expansion for years into the future, with little chance of pronounced economic weakness, my analysis continues to indicate that such a scenario will not prove accurate, unfortunately.
The Special Note summarizes my overall thoughts about our economic situation
SPX at 1317.37 as this post is written