Economic Recoveries 101

There’s a lot of concern out there about the next recession – and yes, I promise it’s coming.

The next recession is always coming, regardless of how badly the Federal Reserve wants to nullify the business cycle and pretend it doesn’t exist. The question is not if but when. Some bearish strategists say we’re already in it in all but name. Some bullish strategists would say that we’re on the cusp of the return of real economic growth, any day now, and that ISM numbers or car sales or home starts are somehow presaging this.

And then there are the realists (a group to which I hope I belong) who would say that we are not in a recession yet but we might as well be.

Based on the most important measures (employment, confidence, wage growth) it feels like a recession for the most part anyway and people are behaving as though we’re in one. You’ll forgive the barely employed father of three in the rust belt for not clicking his heels about this month’s fucking beige book readings. We’re at a rate of economic growth just above stall speed and the risk of tipping into a recession is ever-present at all times so long as we remain in this state.

Further, we’ve never been able to truly decouple from a synchronized slowdown with Europe – short-term decouplings always lead to an eventual recoupling, thanks to the incontrovertible truth of our export dependence. And because we know that Europe is now in a continent-wide recession, possibily headed toward a depression, it’s not a stretch to say that we’ll be joining them soon enough.

The reason why this matters is that the typical recession involves a 25 to 30% pullback for the stock market.

But as for the timing of the next recession, don’t ask me. I can only provide you with the historical lengths of prior economic recovery periods, I’ll let you conclude what this recovery period will ultimately finish up at.  Some key things you need to know:

1.  The first thing you have to be aware of is that this recovery officially dates back to the end of the last recession, pegged at July 2009 by NBER (the body that officially calculates this things).

2.  That makes this particular recovery, pathetic though it may be, 38 months old already.

3.  There have been ten other economic recoveries following recessions since World War II prior to this one.

4.  The shortest recovery period (also called an expansion) was 24 months long, from April of 1958 to April of 1960.

5.  The longest expansion in the post-war period was 120 months, from March 1991 to March 2001.

6.  The average economic expansion during this period has been 63 months, or roughly five years, in length.

7. Our current expansion of just over 3 years is roughly two thirds of the way to that average length.

8. The best jobs growth we’ve seen in an economic recovery took place during the 1982-1990 period, when employment jumped by 24%.

9. The worst jobs growth in an economic recovery was recorded during the last one, 2001-2007, which was an anemic 6%.

10. The good news is that the average post-World War II recession has spanned just 11 months in length, hence we are in recession less than 20% of the amount of time than we are in recovery or expansion.

So, having this knowledge as the backdrop, feel free to ponder the question of how much longer this recovery should/might last.

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. دوربین مدار بسته commented on Aug 13

    دوربین

    I completely really like your blog and discover a great deal of your post’s to be exactly I’m searching for. Does a single offer guest writers to write material accessible for you? I would not brain creating a put up or elaborating on a couple of of th…

  2. Interracial Porn commented on Aug 13

    Interracial Porn

    […]please stop by the web-sites we adhere to, which includes this one particular, as it represents our picks from the web[…]

  3. ixxx commented on Aug 13

    ixxx

    […]Sites of interest we’ve a link to[…]

  4. Pet Painting commented on Aug 14

    Pet Painting

    […]one of our visitors a short while ago suggested the following website[…]

  5. دوربین مدار بسته commented on Aug 14

    دوربین

    What’s up it’s me, I am also visiting this site on a typical basis, this site is genuinely pleasant and the viewers are truly sharing good thoughts.

  6. beauty commented on Aug 14

    beauty

    […]always a large fan of linking to bloggers that I adore but really don’t get a good deal of link love from[…]

  7. activiteiten commented on Aug 14

    activiteiten

    […]check beneath, are some totally unrelated web sites to ours, even so, they are most trustworthy sources that we use[…]

  8. مه پاش commented on Aug 15

    مه پاش

    My developer is attempting to persuade me to transfer to .internet from PHP. I have always disliked the concept since of the charges. But he’s tryiong none the significantly less. I have been making use of Movable-sort on a number of sites for about a…

  9. pc games free download for pc windows commented on Aug 15

    pc games free download for pc windows

    […]very couple of websites that happen to be detailed beneath, from our point of view are undoubtedly very well worth checking out[…]

  10. Outdoor Lighting commented on Aug 15

    Outdoor Lighting

    […]one of our guests not long ago recommended the following website[…]

  11. free apps download for windows commented on Aug 15

    free apps download for windows

    […]please pay a visit to the websites we adhere to, like this 1, because it represents our picks from the web[…]

  12. swan the mini vibrator commented on Aug 16

    swan the mini vibrator

    […]although sites we backlink to below are considerably not connected to ours, we feel they’re truly really worth a go through, so have a look[…]

  13. therapist website theme commented on Aug 16

    therapist website theme

    […]please take a look at the internet sites we stick to, which includes this a single, as it represents our picks through the web[…]

  14. سكس عربي commented on Aug 16

    سكس عربي

    […]please go to the websites we comply with, which includes this one particular, because it represents our picks from the web[…]

  15. دوربین مداربسته commented on Aug 17

    دوربین

    Do you have a spam problem on this weblog I also am a blogger, and I was curious about your circumstance a lot of of us have developed some great techniques and we are hunting to trade strategies with others, why not shoot me an e-mail if fascinated.