Recession to Hit This Year, Analysts Warn

Jeffdunetz | April 6, 2015
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Senior Correspondent for Fox Business channel Charlie Gasparino was a guest on FNC's Happening Now on Monday and sounded an alarm that a recession may be near. The warning came out of the March jobs report announced Friday which showed a disappointing 126,000 jobs were created during the third month of 2015:

Well this wasn’t just a bad jobs report; this was a lousy jobs report. 128,000 whatever the number was,  it was a very weak number in job creation. When you drill down in the number wages were essentially flat, more people are still dropping out of the workforce, that U-6 number is still high, that’s the real unemployment number. Listen I will say this in this stage of this recovery; this shows us that there is a good chance, I would say 50-50 it can't be guarantee I’m not an economist, but you look at the numbers it looks as though we may be heading back towards a recession. (…) Because all the indicators, particularly the job creation numbers are slowing and they should be accelerating at this point. (…) We should point out that economic expansions even the crummy one we have now generally last that about seven years. That 7-year cycle is just about over. 

Charlie Gasparino is not alone.  In July 2014 David Levy who predicted the collapse of the housing bubble and the severity of the recession which will follow, predicted:

 David Levy, who oversees the Levy Forecast, a newsletter analyzing the economy that his family started in 1949 and one with an enviable record. Nearly a decade ago, the now-59-year-old economist warned that U.S. housing was a bubble set to burst, and that the damage would push the country into a recession so severe the Federal Reserve would have no choice but to slash short-term borrowing rates to their lowest levels ever to stimulate the economy. That's exactly what happened. Now, Levy says the United States is likely to fall into a recession next year triggered by downturns in other countries, the first time in modern history.

Three weeks ago appearing on CNBC Raoul Pal of The Global Macro Investor newsletter predicted a recession by the end of this year:

Plunging oil prices and a strengthening dollar could force the United States into a recession by the end of 2015, according to Raoul Pal of The Global Macro Investor newsletter.

The greenback's strength has pushed oil prices lower and sent fear across the markets. Pal said he now feels that the U.S. is heading toward a recession in the near future.

"There's a probability that the U.S. goes into recession this year alone," Pal said in an interview on CNBC's "Fast Money" on Tuesday.

Pal based his prediction on a number of factors, centered on his view that current trends in the dollar and oil are likely to not only continue, but accelerate. 

Recently the UK Guardian predicted that falling copper prices was an omen of bad things to come:

I’m getting worried that this [drop in copper prices] is telling us not all is right with the global economy and that it is slowing faster than anticipated,” said Robin Bhar, head of metals research at Societe Generale.

“If you asked me three to six months ago, I would have been less worried; I would have said it’s oversupply of oil, iron ore, coal. But the combination of greater supply with weaker demand is suggesting it’s indicative that the global slowdown is taking place.”

Why does copper matter? Because it’s used in all sorts of building materials and historically its price movements were tracked for insights into the robustness of industrial activity. “Copper is a good barometer of economic health and always has been,” Bhar said.

While some say the warning signs are there for a recession in the near future, nothing is for certain but it may make sense to keep an eye on economic development.

 

 

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