No Economic Recession in Sight
U.S. recession 2007 odds:
U.S. recession 2008 odds:
From today's WSJ article "No Recession In Sight," by the chief economist of the Bank of America:
"Despite recent financial turmoil and a dismal housing market, there are key reasons why the economy will continue to expand, albeit at a modest pace, and not go into recession. Businesses are well poised to absorb a period of weaker product demand and are unlikely to significantly alter their hiring and investment behavior. Consumer spending is supported by rising incomes. Exports are strong. And monetary policy is consistent with sustained growth in domestic demand. Next year, we will look back and once again marvel at the flexibility and resilience of the economy."
The "no recession in sight" view is confirmed by futures trading on Intrade.com for contracts on a "U.S. Recession in 2007" and a "U.S. Recession in 2008," shown in the graphs above. For 2007, the chances for a recession have fallen from almost 15% a month ago to almost 5% currently. For 2008, odds of a recession were above 50% for most of September, and have now fallen below 50% in the last week.
Upcoming: On Decemer 1, 2007, the U.S. economic expansion will celebrate its 6th birthday.