Recession indicators can be difficult to read for the average consumer. Fed-speak can be difficult to decipher, and reading the market tends to be on a day delay at the minimum for a non-trader. There are four key statistics that people in the know tend to look to: industrial production numbers, real personal income, nonfarm employment, and real estate sales.
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Description
Recession indicators can be difficult to read for the average consumer. Fed-speak can be difficult to decipher, and reading the market tends to be on a day delay at the minimum for a non-trader. There are four key statistics that people in the know tend to look to: industrial production numbers, real personal income, nonfarm employment, and real estate sales.
The numbers for all four of these statistics are tepid with nonfarm employment and real estate sales being of particular note. On the face of the recent employment reports, the number of employed individuals is up. It tends not to take into account the age of said employees, though. Many generation Y and millenials are actually underemployed or unemployed due to older people re-entering the workforce and taking positions that are normally occupied by people new to the workforce.
Further, real estate sales saw only roughly 25% of total home purchases from the previous year to be made by first-time purchasers while a healthy level for such buyers is about 40%. This means fewer people entering the supporting marketplaces, as well: fewer appliances purchased, less spent on general home improvement, and so forth. The key driver in this drop is suspected to be the sizable amounts of student debt preventing, once again, generation Y and millenials from getting a mortgage due to the payments still being made on student loans.
Four of the 10 major economies are in recession, with the rest in stagnation and recession looming. The US can be argued to be in stagnation right now. Is recession around the corner?
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Notes
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