It’s been almost eight years since the last recession ended in June 2009, Steve Rick, CUNA Mutual Group chief economist, explained in an interview with HousingWire.
With economists predicting the next two years won’t bring a recession, that could put the economy on track for its longest period without a recession in modern history, Rick explained.
In fact, he explained that there are no major imbalances in the market at this point that could bring on a recession.
This week, the ADP National Employment Report predicted strong growth for January with the highest increase in jobs since June 2016. It’s predicted increase of 246,000 is significantly higher than previous months.
Rick’s forecast for Friday’s jobs report is a bit more modest at 225,000 jobs, but still significantly above the last several months. He explained that the jump in business optimism since the election of President Donald Trump pushed many employers to create new jobs.
In fact, Trump’s stimulus plans could even push the economy to 3% inflation, instead of the anticipated 2%, Rick said.
Earlier this week, the Federal Open Market Committee opted not to raise rates during its first meeting of the year, confirming economists’ expectations that they will take a more “wait and see” approach.
However, that was only the first of eight scheduled meetings for 2017.
But another economist insisted that even the projected three rate hikes is too many. Jason Obradovich, New American Funding executive vice president of capital markets, explained in an interview with HousingWire that for all its intentions, the Fed probably won’t be raising rates as much as it would like in 2017.
If the Fed does raise rates too fast, Rick explained that could bring an economic slowdown, or even a recession.
For now, however, the economy is currently enjoying its third longest period without a recession, according to the National Bureau of Economic Research. The longest period was 10 years in the 1990s and the second was just under nine years in the 1960s.