US Recession Monitor – Despite rising odds, no slump in sight

Our internal recession models support our opinion that a looming downturn is unlikely, despite rising recession risks. Our subjective odds of a recession during the next 12 months are 30%.

What you will learn:

• Falling consumer sentiment increased concerns about a negative feedback loop of weaker household spending leading to business layoffs and loss of income, causing a further pullback.
• However, household balance sheets are healthy, layoffs remain low, and the economy has weathered more significant shocks in recent years without falling into a recession.
• A larger correction to equity markets is a downside risk via the wealth effect. Although, the stock market isn’t the economy, and many corrections don’t lead to a recession.

For more insights on the 2024 US Presidential Election, click here.