Not Enough for a Recession
Even though our economy is predicted to shrink in the second quarter, it isn’t going to have enough momentum to cause a full scale recession.
The U.S. economy will shrink in the second quarter, but avoid a recession this year as housing’s drag will ease in the second half, helping normal growth return next year, according to a UCLA Anderson Forecast report released on Tuesday.“The data don’t yet add up to a recession and there is nothing here to challenge the basic story of sluggishness that we have had for two years,” the forecasting unit’s report said, adding: “Our no-recession forecast remains nervously intact.”
Amid a cooling economy, the labor market is only slowing so it lacks enough drag to force a recession, according to the forecasting unit.
“The weakening job market is completely consistent with our longstanding forecast of a housing adjustment that is mostly confined to housing,” the report said.
The UCLA unit added that its forecast also hinges on whether falling home prices depress consumer spending, and that it does not expect consumers to overreact.
Good news for all, eh?
