Prepare For The Recession | THIS WEEK
Published: 2022-07-25
Status:
Available
|
Analyzed
Published: 2022-07-25
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Predicts a high probability of negative GDP numbers on Thursday (July 28, 2022), indicating a recession in the first six months of 2022.
"I bet there's a really solid chance that Thursday this week the GDP numbers will be negative which means we will have been in a recession at least in the first six months of this year"
Pending
The Bureau of Economic Analysis will officially announce if the US is in a recession on July 28th at 8:30 AM, based on the second quarter's advance estimate. A negative number will confirm a recession.
"this week on Thursday July 28 at 8 30 a.m We will know finally and officially whether we're in a recession or not because the Bea the Bureau of economic analysis will release What's called the second quarter Advance estimate and if that report and the number comes out to be negative doesn't matter what number just as long as it's negative then we will be in an official recession"
Pending
Anticipates significant media coverage and focus on a recession if the upcoming GDP report is negative.
"if this Thursday we get a negative GDP report then the first thing that's gonna happen is the media will have a field day and this recession is here will be the only thing we hear for the next few months"
Pending
The speaker believes that if a recession is officially declared, it means the US has likely already been in one for the past six months, due to the backward-looking nature of GDP data.
"but the truth of what it actually means is that we will have already been in a recession for the last six months because remember the GDP data is always backwards looking"
Pending
Explains the Som Rule, a recession indicator based on a 0.5 percentage point rise in the 3-month moving average unemployment rate compared to its 12-month low.
"The Som rule says it identifies signals related to the start of a recession when the three-month moving average of the national unemployment rate Rises by half a percentage point or more relative to its low during the previous 12 months"
Pending
A White House press release explaining recession definitions is considered a significant recession indicator by the speaker.
"I believe we just got one of the biggest recession indicators yet and that is a press release from the White House which is trying to explain to us what a recession is and what it isn't"
Pending
States that the current Som number is zero, suggesting a low probability of being in or entering a recession soon, as unemployment has not risen by the threshold defined by the Som Rule.
"now right now our Som number is at zero which means in the last three months of unemployment data we have not spiked half a percent higher than the lowest point of the last 12 months of unemployment data which tells us there's a decent chance that we're not in a recession now and that we shouldn't be in one anytime soon"
Pending
The speaker highlights the White House's statement that two consecutive quarters of negative GDP is not the sole or official definition of a recession used by economists.
"while some maintain that two consecutive quarters of falling real GDP constitute a recession that is neither the official definition nor the way economists evaluate the state of the business cycle"
Pending
Warns that a combination of a severe recession and high inflation could lead to stagflation.
"if we combine that with the high inflation we have now we'd actually get something called stagflation which would obviously not be good"
Pending
The speaker notes that the White House states official recession determinations and economic assessments rely on a holistic view of data, including labor market, consumer/business spending, industrial production, and incomes, not just GDP.
"instead both official determinations of recessions and economists assessment of economic activity are based on a holistic look at the data including the labor market consumer and business spending Industrial production and incomes"
Pending
The speaker cites the White House suggesting that even two consecutive quarters of negative GDP might not necessarily indicate a recession.
"based on my wonderful logic a may not even equal B at all based on these data it is unlikely that the decline in GDP in the first quarter of the Year even if followed by another GDP decline in the second quarter indicates a recession"
Pending
The National Bureau of Economic Research's (NBER) Business Cycle Dating Committee is identified as the official body for determining what constitutes a recession.
"the business cycle dating committee is the official scorekeeper is for what a recession actually is"
Pending
The speaker interprets the White House's stance as emphasizing unemployment levels, which are currently low, as a key factor in assessing recession status.
"the paper is trying to say that instead we should focus on unemployment levels which are totally fine see because there's no spikes to unemployment"
Pending
The speaker asserts that unemployment rates are not a leading indicator of a recession, as recessions precede spikes in unemployment.
"unemployment rates are not a leading indicator of a recession because a recession happens first and then unemployment happens"
Pending
The speaker points to a graph demonstrating that recessions (gray bars) historically occur before unemployment rates spike.
"see those gray bars right there that's where the recessions are and if you follow the trend of this unemployment line you can see that the gray areas happen first and then unemployment spikes"
Pending
Business owners will likely wait for official confirmation of a recession before making cost-cutting decisions like layoffs, indicating that official declarations influence business behavior.
"if I'm the owner of a business I'm not going to start laying off my employees because I have a sneaking suspicion of a recession I'm going to wait until I know for sure from the sources because then when I know for sure that's when I'll get scared that's when I'll want to play defensively and start cutting my costs"
Pending
The speaker points out that the NBER's Business Cycle Dating Committee does not consider inflation data when assessing recession odds, deeming this omission significant.
"the committee does not consider inflation data and that seems rather important and try to calculate what the odds of a recession might be"
Pending
The speaker highlights a statement from the White House press release suggesting the recession determination committee does not consider unemployment in its calculations, which the speaker finds contradictory.
"the committee does not even consider unemployment in its calculation"
Pending
The speaker notes that metrics like non-farm payrolls, real personal consumption expenditures, real income, and industrial production are all increasing, suggesting the economy is not slowing down and a recession may be avoided.
"non-farm payrolls real personal consumption expenditures real income less transfers and industrial production all going up which all implies that we are not slowing down and that potentially we're not going to be in a recession"
Pending
The Som Rule is defined as a recession indicator where the three-month moving average of the national unemployment rate increases by 0.5 percentage points or more compared to its low in the preceding 12 months.
"the Som rule says it identifies signals related to the start of a recession when the three-month moving average of the national unemployment rate Rises by half a percentage point or more relative to its low during the previous 12 months"
Pending
The current Som number being zero indicates that the unemployment rate has not risen by 0.5% in the last three months compared to the previous 12 months' low, suggesting a lower chance of an imminent recession.
"now right now our Som number is at zero which means in the last three months of unemployment data we have not spiked half a percent higher than the lowest point of the last 12 months of unemployment data which tells us there's a decent chance that we're not in a recession now and that we shouldn't be in one anytime soon"
Pending
The government's message is that while the first six months of the year might have been a recession (if GDP is negative), current data suggests the US may not be in one now.
"ultimately what the government is trying to tell us is that if we're looking in the first six months of this year there's a decent chance that we could have been in a recession if the GDP numbers come out negative this week on the other hand if we're looking at what's going on today there's a decent chance we may not be in a recession"
Pending
The speaker warns that a combination of a real recession and high inflation could lead to stagflation.
"if we combine that with the high inflation we have now we'd actually get something called stagflation which would obviously not be good"
Pending
The speaker predicts with high confidence that Thursday's GDP numbers will be negative, indicating a recession in the first six months of the year.
"if I were a betting man which I'm not I bet there's a really solid chance that Thursday this week the GDP numbers will be negative which means we will have been in a recession at least in the first six months of this year"
Pending