Post: #1

I've noticed an uptick in articles predicting a recession in 2016.

6 Factors That Point to Global Recession in 2016
Are We Headed for Recession?
A recession worse than 2008 is coming
The Recession of 2016

Thoughts?

I'm old enough now to have gone through two of them as a working adult: first when the the dot-com bubble burst and later the 2008 recession.

With the election coming up, it's going to be interesting to see how things play out.

Post: #2

I don't know if I agree with the "world is over crowd", but there could definitely be a recession this year.

Recessions tend to happen every five years or so, so we are overdue for one.

Post: #3

You mean we left the last one?

Post: #4

The economic definition of a recession is two consecutive quarters of negative economic growth. That hasn't happened in the U.S. recently:



They tend to hit the U.S. (and the world) every 7 years. The last two happened in 2008 and 2001. Buckle up.

Post: #5

We're still getting out of the last one. Probably nothing to worry about right now.

Generally-speaking, economies of first-world countries have a natural up-and-down wave curve centered around an upward-sloping natural curve.

For example, this is GDP per capita, which isn't the only relevant measurement of an economy but still a good, rough indicator.



Point is, we're still getting out of ours. We're still going uphill. Just recently, the Federal Reserve increased interest rates. When the economy does poorly, they do the opposite. This means that we are still making tip toe steps to get out of the 2008/2009 dip.

Once we stop going uphill, we'll have a natural recession to worry about. Unless, as you said, something unexpected happens in the mean time. (For example, the Dot Com bubble.)

Post: #6

^Yep, economic growth has been anemic since 08. That's why the chart shows GDP per capita falling. The population was growing faster than the economy.

A recession, by definition, isn't an indicator of overall economic growth. It only indicates the direction of growth. If a country's GDP plummets 10% in Q1 and an additional 10% in Q2, you have a recession. The GDP could bounce back 1% in Q3, but that would be enough to break the recession. A recession ends when there is a quarter with any positive economic growth from the previous quarter of negative growth (no matter how small). But it would take many years of slow economic growth to get back to where you started in Q1.

Post: #7

GDP per capita isn't terribly useful as an economic indicator because the extreme level of income inequality in the United States distorts the average value.

Consider the fact that since 2000, real median household income (a better indicator of the strength of the "middle class") has shrunken while the cost of living has exploded:

Post: #8

(01-23-2016 04:30 PM)Renzy Wrote:  I've noticed an uptick in articles predicting a recession in 2016.

6 Factors That Point to Global Recession in 2016
Are We Headed for Recession?
A recession worse than 2008 is coming
The Recession of 2016

Thoughts?

I'm old enough now to have gone through two of them as a working adult: first when the the dot-com bubble burst and later the 2008 recession.

With the election coming up, it's going to be interesting to see how things play out.

I don't have a lot of data points but what I see in NE China is terrifying. If the rest of the world is anything like the stories and numbers Ive heard and read 2016 is going to look bad.

A recession can be fine if the reasons for that problem are addressed, but I don't see any big changes coming.