Why We’re Unlikely to See a Recession in 2020

Recession?  What recession?

Months ago, analysts forecast a 50% chance of a recession by 2020.  

Now, many aren’t so sure, as markets explode on a series of interest rate cuts, a possible phase one deal with China, and a new trade deal with Mexico and Canada that would keep goods between us and them tariff-free.  

“Some of the obstacles to growth, including the Fed and trade uncertainties, are being removed, and that will have a powerful positive impact on the economy,” said Larry Kudow, as quoted by The Washington Post.  

Plus, “The risk of a trade-war-induced recession – which we never thought was high – has been materially reduced,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics, as quoted by The Washington Post.  

The White House also believes the trade deals could push growth up a half a percentage point in 2020, up from about 2.3% this year.

All of that shelves fears of a potential recession in the New Year.

Better, homebuilder sentiment hit a 20- year high

Thanks to a stronger economy and housing shortage, homebuilders are the most confident they’ve been in 20 years.  In fact, the National Association of Homebuilders / Wells Fargo Housing Market Index, as noted by Business Insider rocketed to 76 this month.

That’s the highest it’s been since June 1999.  Anything over 50 a strong sign of confidence.

“Builders are continuing to see the housing rebound that began in the spring, supported by a low supply of existing homes, low mortgage rates and a strong labor market,” said NAHB Chairman Greg Ugalde, as quoted by CNBC.