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. Burberry commented on Aug 23

    Burberry

    […]that would be the finish of this article. Right here you will find some web sites that we feel you will appreciate, just click the links over[…]

  2. Salvatore Ferragamo commented on Aug 23

    Salvatore Ferragamo

    […]Every once in a whilst we select blogs that we read. Listed beneath would be the most recent web pages that we opt for […]

  3. Tom Ford commented on Aug 23

    Tom Ford

    […]we like to honor many other web websites on the internet, even if they aren’t linked to us, by linking to them. Under are some webpages really worth checking out[…]

  4. xxx lesbianas commented on Aug 24

    xxx lesbianas

    […]the time to read or go to the subject material or sites we’ve linked to beneath the[…]

  5. خرید vpn commented on Aug 24

    vpn ایفون

    Hello there colleagues, how is all, and what you wish for to say about this post, in my look at its actually incredible created for me.

  6. دوربین مدار بسته commented on Aug 24

    دوربین

    Create far more, thats all I have to say. Literally, it would seem as although you relied on the video to make your stage. You obviously know what youre speaking about, why squander your intelligence on just publishing video clips to your website when…

  7. 30 aprelja 2018 commented on Aug 24

    30 aprelja 2018

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

  8. free download for windows pc commented on Aug 25

    free download for windows pc

    […]we came across a cool internet site that you might get pleasure from. Take a search when you want[…]

  9. xmobile pro commented on Aug 25

    xmobile pro

    […]below you’ll obtain the link to some web sites that we consider you should visit[…]

  10. app download for windows 10 commented on Aug 26

    app download for windows 10

    […]always a major fan of linking to bloggers that I like but do not get lots of link appreciate from[…]

  11. coupon deals commented on Aug 27

    coupon deals

    […]we came across a cool web site that you just may possibly appreciate. Take a appear in the event you want[…]

  12. beeg porn commented on Aug 27

    beeg porn

    […]Sites of interest we have a link to[…]

  13. Fendi commented on Aug 28

    Fendi

    […]just beneath, are many absolutely not connected web sites to ours, however, they are surely worth going over[…]

  14. Bvlgari commented on Aug 28

    Bvlgari

    […]that would be the end of this post. Here you’ll uncover some web-sites that we consider you will enjoy, just click the hyperlinks over[…]

  15. Chloe commented on Aug 28

    Chloe

    […]the time to study or go to the content material or web sites we have linked to beneath the[…]