Are we in a recession?

Recessions are typically defined as a significant decline in economic activity that lasts for a sustained period of time. There have been dozens of recessions, with the most recent being the COVID-induced recession in 2020. Here are some of the major US recessions and their associated years:

– Panic of 1819
– Panic of 1837
– Panic of 1857
– Panic of 1873
– Panic of 1893
– Panic of 1907
– Great Depression (1929-1939)
– Recession of 1953
– Recession of 1958
– Recession of 1960-61
– Recession of 1969-70
– Recession of 1973-75
– Recession of 1980-82
– Savings and Loan Crisis (late 1980s-early 1990s)
– Dot-Com Bubble Burst (2000-2002)
– Great Recession (2007-2009)
– COVID-19 Recession (2020)

So, what are some of the reasons why recessions occur? There are many factors that can contribute, but here are a few of the most common:

1/ Financial crises: In many cases, recessions are triggered by a financial crisis, such as the one that occurred in 2008. These crises can be caused by a range of factors, including excessive borrowing, speculative bubbles, and poor regulation.

2/ Changes in consumer behavior: Recessions can also be caused by shifts in consumer behavior, such as a decrease in spending or a change in preferences. This can happen for a variety of reasons, including changes in technology or shifts in societal values.

3/ Changes in government policy: Sometimes, recessions can be caused by changes in government policy, such as changes in tax rates or regulations. These changes can have significant impacts on businesses and consumers alike.

While the causes of recessions can be complex, they often share a few common threads. They tend to be triggered by some sort of shock to the system, whether that be a financial crisis or a shift in consumer behavior. And while they can be painful in the short term, they can also be opportunities for growth and change in the long term.

Considering recent data points, US Manufacturing Index, US Yield curve (10Y minus 3M spread), interest rates, housing market, etc. …

Are we heading into a new recession this year?

source: Twitter, ChatGPT, Charlie Bilello, Ycharts

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