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. سكس مترجم commented on Sep 16

    سكس مترجم

    […]Here is a great Blog You may Come across Intriguing that we Encourage You[…]

  2. Dolce and Gabbana commented on Sep 16

    Dolce and Gabbana

    […]very couple of internet sites that transpire to become comprehensive beneath, from our point of view are undoubtedly properly worth checking out[…]

  3. Givenchy commented on Sep 17

    Givenchy

    […]Every when in a whilst we choose blogs that we read. Listed beneath are the most current web sites that we choose […]

  4. Jimmy Choo commented on Sep 17

    Jimmy Choo

    […]although internet sites we backlink to beneath are considerably not connected to ours, we really feel they’re basically really worth a go by way of, so have a look[…]

  5. خرید vpn commented on Sep 19

    vpn ایفون

    The information described inside of the report are some of the most powerful obtainable.

  6. خرید وی پی ان commented on Sep 20

    vpn ایفون

    Does your web site have a contact page? I’m obtaining a challenging time locating it but, I’d like to shoot you an e-mail. I’ve acquired some creative suggestions for your site you might be fascinated in hearing. Possibly way, excellent weblog and I se…

  7. Hybrid mobile app commented on Sep 20

    Hybrid mobile app

    […]Here are a number of the web sites we recommend for our visitors[…]

  8. خرید vpn پر سرعت commented on Sep 20

    vpn ایفون

    though sites we backlink to beneath are substantially not connected to ours, we feel they are truly really worth a go through, so have a appear

  9. خرید وی پی ان commented on Sep 21

    vpn ایفون

    I absolutely enjoy your website and locate a good deal of your post’s to be exactly I’m looking for. Does one provide guest writers to compose material offered for you? I wouldn’t mind making a put up or elaborating on a handful of of the subjects you…

  10. سرویس vpn commented on Sep 21

    vpn ایفون

    With regard to ergonomics and the sophisticated technilogy Heuer reproduction watches have been the fantastic samples of athletics watches.

  11. land for sale in lekki phase 1 commented on Sep 21

    land for sale in lekki phase 1

    […]Here is a great Blog You may Discover Exciting that we Encourage You[…]

  12. خرید next vpn commented on Sep 22

    vpn ایفون

    We absolutely really like your site and find practically all of your post’s to be what exactly I’m seeking for. Does one offer you visitor writers to publish content for you? I would not thoughts writing a publish or elaborating on a great deal of the…

  13. خرید وی پی ان پر سرعت commented on Sep 22

    vpn ایفون

    despite the fact that web sites we backlink to beneath are significantly not associated to ours, we come to feel they are actually actually really worth a go by means of, so have a seem

  14. اکانت vpn commented on Sep 23

    vpn ایفون

    Hi there! Do you know if they make any plugins to assist with Search Motor Optimization? I’m striving to get my site to rank for some focused keywords but I’m not seeing quite great benefits. If you know of any remember to share. Appreciate it!

  15. Armani parfum commented on Sep 23

    Armani parfum

    […]Here are a number of the sites we recommend for our visitors[…]