Predictions of an imminent (or somewhat imminent) recession are currently trending across financial news websites.
The yield curve has inverted, the stock market is bucking, central banks are cutting rates, and a trade war with China continues to simmer.
“Recession: a period of economic decline that lasts six months or more.” – How You’ll Know a Recession Is Coming, via Lifehacker
Of course, opinion is greatly divided about the timing and potential impact of an upcoming recession.
Some people are predicting another “Great Recession” like 2007. Others say the recent expansion will continue, just at a slower rate.
One thing we can say for certain: at some point, the current economic expansion will end, and a period of recession will begin.
However, we can’t easily predict when that will happen. And we might not even know when a recession begins. The recession of 2001 was “so mild, in fact, that we didn’t know that it was happening until it was basically over.”
A Spreadsheet to “Predict Recessions”
This Google spreadsheet combines data to show where the economy stands today vs 20 years ago vs 2007 and 2008, the dates of the last U.S. recession.
• Monthly Supply of Homes
• Employment rate (%)
• Average Hourly Earnings of All Employees: Total Private (USD)
• Real GDP (USD)
• Stock Market Capitalization to GDP for United States
• Stock Market Capitalization to GDP for China
• Stock Market Capitalization to GDP for Germany
• Tobin’s Q
• Jobless Claims
• S&P 500 Price to Sales Ratio
• S&P 500 Price to Book Value
• S&P 500 Earnings Yield
• Schiller price /earnings ratio
• US GDP Growth Rate by Year
Poll: are you taking steps to prepare for recession?
Like the debate around the timing of the next recession, opinion is divided about how to prepare for it.
Take a quick anonymous poll to share your thoughts on this matter. Feedback from this poll will be shared with Tiller Money blog and newsletter readers.
This isn’t intended to be a scientific poll, simply a quick “reading of the room” to see how everyone’s feeling right now.