What Is A Recession And Are We In One Now?

Summary

  • A recession is not two-quarters of negative GDP.
  • The US economy is not in a recession today but is on a pre-recessionary path.
  • The labor market will determine if the US economy falls into a recession in the next 6-8 months.
  • The risk of a recession is rising with each passing day, which argues that investors should remain highly cautious of risk assets.
  • Looking for a helping hand in the market? Members of EPB Macro Research get exclusive ideas and guidance to navigate any climate. Learn More »

Recession Road Sign

ZargonDesign/E+ via Getty Images

With the stock market tumbling and a negative sign in front of the first-quarter GDP report, the "R" word has started to circulate with increasing concern among investors.

Historically, it's uncommon for the broad S&P 500 to

SPX Drawdowns

YCharts

Real GDP

FRED

Economic Growth

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Real Income

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Employment Growth

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Recession or Not?

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This article was written by

Eric Basmajian profile picture
15.63K Followers
Tracking Economic Inflection Points To Guide Your Asset Allocation Strategy

Eric Basmajian is an economic cycle analyst and the Founder of EPB Macro Research, an economics-based research firm focusing on inflection points in economic growth and the impact on asset prices.

Prior to EPB Macro Research, Eric worked on the buy-side of the financial sector as an analyst at Panorama Partners, a quantitative hedge fund specializing in equity derivatives. 

Eric holds a Bachelor’s degree in economics from New York University.

EPB Macro Research offers premium economic cycle research on Seeking Alpha. 

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Disclosure: I/we have a beneficial long position in the shares of SPY, XLU either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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