The bond market thinks a recession is likely. the NBER would now—if it still paid attention to anything but payroll—would be wondering when it should call the peak. But we seem to have decided that a recession is not a recession of economic activity in general from a previous peak but ragther a sudden, sharp, significant, and asymmetric fall in employment. The key would then be found in the hearts and minds of businesses: Are things likely to be bad enough in the future that we need to start shedding labor now? Can we use the excuse of 'hard times' to break our implicit contracts with our workers without incurring heavy costs in terms of reduced worker morale? When the answers two those two questions become 'yes', that is a recession. And we are not yet there—and we have no good models of what would push us there:

Menzie Chinn: Recession Anxieties, June 2019: "Different forward looking models show increasing likelihood of a recession. Most recent readings of key series highlighted by the NBER’s Business Cycle Dating Committee (BCDC) suggest a peak, although the critical indicator—nonfarm payroll employment—continues to rise, albeit slowly...

Recession Anxieties June 2019 Econbrowser


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