Edward Harrison on Biz Cycle coming to its end
In the video below, Edward Harrison of Boom/Bust says some important things. Watch after 25:30 minute point.
- the unemployment rate is not a leading indicator for a recession. Unemployment can start to tick up as a recession is starting.
- watch non-farm payrolls.
- the Biz cycle is coming to its end.
So many well known economists got the business cycle wrong. They stated all along that the Fed should keep rates low until the recovery got going. They still see a large part of the cycle ahead. They see slack but they did not see an effective limit on the slack.
The Fed missed a whole interest cycle. It is important to follow an interest cycle with proper rates that discipline production. If rates stay too low for too long, as we have seen, then zombies more and more infect productivity, prices and production.
But I totally agree with him. My models have been tracking the business cycle correctly for years. The ultimate end of the business is drawing upon us… I give it by middle of next year for sure, and as I have been saying all year, a 70% chance by the end of 2016.
Interesting. Thanks for posting.
Actually the unemployment rate *is* a leading indicator for recessions, as Georg Vrba has shown. It is a something of a rare bird, in that it is also a lagging indicator for the end of recessions.
The unemployment rate has ticked up from its May low of 4.7% to today’s 5.0%. If it ticks up another ).1% or 0.2% in the next couple of months, that will be a warning signal.
EL – Wow! You really do have balls. You say that you are 70% certain the US will be in recession by the end of the year. So this will start in the next 80 days? That is what you think?
And you are 100% the the US will be in recession in the first half of 2017. 100%?? Really?
For those who read this please consider what EL has said in the past:
1) On 2/1/16 I asked when “your model” showed the business cycle ending. You answered me “3rd quarter 2014”. So for the last 2+ years your model has been wrong, yet you say it works perfectly.
2) On 1/28/16 you said, “the business cycle has ended”. How is that working out for you? Your model was flat out wrong!
EL – Anyone who says “I am 100% certain what will happen in the economy” is either a fool, or is just making stuff up.
I will check back with you on 6/30/17 to see if your 100% sure thing has paid off.
PS your 70% for the rest of this year is just a junk forecast.
Hours worked seems to be a leading indicator to me.
Nothing to see there.
Ouch, I posted annual data. Quarterly data is not so clear and it also forecasts the recession of 1996, but I see no recession inside 6 months.