From Investing.com: 2024-05-25 04:06:00

Wall Street economists are reducing the risk of a recession, forecasting growth at 1.4% in the third quarter this year, up from previous estimates of sub-1% growth. Many recession indicators, such as yield curve inversions and negative Leading Economic Index readings, have historically preceded recessions, but the U.S. has not entered one yet. The economy has defied recession expectations due to fiscal support and monetary injections, with estimates suggesting a recession may not occur until late 2025 to mid-2026. While the risk of recession is currently low, it is not zero, so investors should watch economic data closely for signs of weakening growth.

Real retail sales have declined since the peak of economic activity in 2021, signaling a potential slowdown in consumer demand and economic growth. With full-time employment reversing as a key indicator of past recessions, the economy may struggle to maintain growth if consumer spending falters. Despite the possibility of avoiding a recession with additional support, consumers facing stagnant wage growth and higher living costs may reach their debt limits, potentially increasing the risk of recession. Paying attention to future economic data is crucial, as the risk of recession remains a possibility in the near future.



Read more at Investing.com: The Risk of Recession Isn’t Zero as the Market Seems to Think