The True State of the U.S. Economy
“Slumping asset prices show a recession is probably on its way. … Stocks tend to fall more frequently and further than property values, so they are better recession-predictors.” – IMF research paper by economists John C. Bluedorn, Joerg Decressin and Marco E. Terrones.
The fact that stock prices have been drifting lower, doesn’t prove that the economy is headed for recession. Nor does political dysfunction (government shutdown), droopy home sales, plunging confidence, chronic high unemployment, rising levels of extreme poverty, unprecedented public dependence of food stamps, weak personal consumption, stagnant wages, falling middle class incomes, or gaping inequality. They may show a country that is on the wrong track and has its priorities mixed-up, but they don’t show that another recession is immanent. Even so, it’s easy to wonder how bad things have to get before the economy more closely reflects the mood of the country which…
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