Why Fear of a 2020 Recession Is Receding
Business owners have been experiencing a lot of anxiety lately with rumors of an incoming recession looming over them for the better part of 2019. However, a recent influx of news reports are suggesting the exact opposite. So, which is it? Is America on the brink of a recession that will lead to massive layoffs like the Great Recession of the late 2000s? Or are we bound for another year of sustained economic growth? In this editorial, the construction industry advocates from Cotney Construction Lobbying will answer all of these questions and more.
Keep in mind that the moves you make as a business owner will depend on whether or not a recession is truly on the horizon. If we dip into bear market behavior, and money is sucked out of the construction industry and stuffed back into private bank accounts, your profits will surely suffer as a result. On the other hand, if you make some smart investments and a recession never materializes, you might be able to take your business to the next level.
The U.S. Economy Is Steady
An article recently published by the Washington Post helps break down why talks of a recession have started to dwindle. Between a series of interest rate cuts and proposals to amend high-risk trade conflicts with China and our North American neighbors, the U.S. economy is chugging ahead with confidence. This is big news for business owners. Let us not forget that recession forecasters were essentially guaranteeing a recession just a few months ago. Suddenly, the economy has shifted back onto a steady trajectory, mainly due to the Federal Reserve’s interest rate reductions. The economy also reached some record highs during the last quarter of 2019, despite ongoing skepticism about the health of the economy.
The Evidence Isn’t Strong
When it comes to an impending recession, the signs that precede it are pretty straightforward. In an editorial published on Forbes titled “Three ‘100% Guaranteed’ Reasons That No Recession Is Near”, a former consultant for multi-billion dollar funds, John S. Tobey, breaks down the three signs that typically predate a recession, including:
- The stock market is on a decline. The stock market continues to thrive despite fear of a recession in 2020. Markets hitting all-time highs is the antithesis of an impending recession, especially when you consider the fact that the stock market is a product of anticipation.
- Economists have reached a uniform consensus on the topic of a recession. “When economists agree that a recession is approaching, ignore the forecast,” states the Forbes article. Economists’ insights are significantly more accurate when dealing with historical data. Whether or not individuals can actually predict markets is still a topic of debate.
- Recession stories are trending in the media, but there’s very little new information. Fear-mongering journalism has always been an effective way to attract viewers and readers, but it doesn’t mean the news being spouted recklessly is actually true. Typically, we find that the same facts and statistics are rehashed over and over again to pad headlines, when, truthfully, there’s not that much to worry about.
If you would like to speak with a construction industry advocate from Cotney Construction Lobbying, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.
Cotney Construction Lobbying, LLC does not provide legal services and any statements made on this website are intended to apply only to non-legal, lobbying services.