No apparent recession as of August 2024 data (my interpretation – see the opposing views here). Using year-ago financial data, what would have probit regressions have indicated? It matters which variables you use, and whether you include the 2020 recession.
Figure 1: Year ahead probit regression estimated probabilities, using 10yr-3mo term spread and short rate (bold dark blue), same using sample ending before pandemic (light blue), term spread, short rate and foreign term spread (tan), term-premium adjusted 10yr-3mo term spread and term premium and debt-service ratio (green). Sample 1986-2024M08, assuming no recession has begun by 2024M08. NBER defined peak-to-trough recession dates shaded gray. Numbers indicate estimated probabilities for September 2024. Source: author’s calculations.
Discussion of use of foreign term spread, a la Ahmed-Chinn (JMCB, 2024) here; and use of debt-service ratio a la Chinn-Ferrara (2024) here. Breaking out the term premium discussed here.
Note that the probabilities associated with the term spread/short rate specification depend critically on the sample used, in particular whether the 2020 recession is included in the term spread & short rate specification. Using only term spread data up to 2018M12 (so recession/no recession dummies up to 2019M12) and predicting out-of-sample yields a recession probability of 78% in September (this month). Incorporating the 2020 recession into the sample results in only a 48% probability for this month (peak at 58% in May). If one thinks the 2020 recession would not have occurred without the pandemic, then one could reasonably argue for throwing that data out.
So… the recession may still come (or has already come and we don’t know it).
So Kudlow the Klown, Peter Thiel, and WILBUR (think Mr. Ed) Ross all say we are in a recession.
I’m sorry – when is a real economist going to join this list. And no – I do not count fake PhD EJ Antoni as a real economist.
Two years ago, we were having the same discussion. Seems that “perceived odds” of recession increase in any election year when a Democrat is in the White House.
A pandemic can do a great deal to mess up the normal patterns of economic activity, making recession mongering easier now than in normal times.
What matters for politics is not whether the NBER declares a recession prior to the election – they won’t – but whether the Heritage Foundation and faux news can talk people into “feeling” a recession. Obviously, they can. After all, what matters more, the welfare of the nation or the outcome of the election? We all know the answer to that one.
Is Trump’s plan to balance the budget to raise tariffs to 200%?
Trump threatens John Deere with 200 percent tariff if it outsources manufacturing
https://www.msn.com/en-us/money/companies/trump-threatens-john-deere-with-200-percent-tariff-if-it-outsources-manufacturing/ar-AA1r4z8m?ocid=msedgdhp&pc=U531&cvid=6199c4eb9a64442cb28df77387c1fffb&ei=11
Former President Trump threatened Illinois-based John Deere on Monday with massive tariffs on its products if it outsources some of its manufacturing to Mexico as it had previously announced, the latest indicator he would use tariffs aggressively if he wins in November. “I just noticed behind me John Deere tractors. I know a lot about John Deere, I love the company,” Trump said at an event with farmers in Pennsylvania.
“But as you know, they’ve announced a few days ago that they’re going to move a lot of their manufacturing business to Mexico,” he continued. “I’m just notifying John Deere right now, if you do that, we’re putting a 200 percent tariff on everything you want to sell into the United States, so that if I win John Deere is going to be paying a 200 percent — they haven’t started it yet. Maybe they haven’t even made the final decision yet. But I think they have.”
I guess Trump loves this company so much that he will make it uncompetitive on world markets!
Trump Media & Technology Group Corp. (DJT)
https://finance.yahoo.com/quote/DJT/
Closed at $12.15 a share. This turkey may become a penny stock by year’s end!