U.S. and global growth continues to be strong and exceeds potential. The May Outlook Assessment evaluates U.S. and global 2018 forecasts made at the beginning of the year. Practically all economies are growing above potential and slack has already disappeared or is disappearing rapidly. However, recent U.S. and global data have been a bit softer than expected, which might mean that acceleration in momentum is waning.
The Longbrake Letter
Optimism abounds. Best to enjoy the good times now because we know from history that strong economic momentum, when the economy is operating at or above full capacity, eventually leads to recession and correction of the imbalances that built up during the euphoric period of overly strong growth. Professional forecasters are worried; most others are not. In this month’s letter Bill Longbrake examines what might go wrong and lead to recession in 2020 or possibly in 2019. Bill also discusses whether weak productivity will improve and boost economic growth.