ILCB - Recession Forecasts Take A Beating After Strong Q4 GDP Growth

2024-01-26 21:06:00 ET

Summary

• For the perennial recession forecasters, the 3.3% rise in output in Q4 was the latest blow to ongoing warnings that trouble is just around the corner.
• Last year was yet another master class of showing the power of ensemble models that carefully draw on multiple indicators and models.
• Near-term modeling estimates for the Economic Trend Index (ETI) and Economic Momentum Index (EMI) project that the US economic bias will remain comfortably positive through February.

The only thing that was genuinely surprising in yesterday’s fourth-quarter report on US economic activity was the strength of the increase. The positive directional bias, by contrast, has been relatively clear for weeks, if not longer. Assuming, of course, that you were analyzing a broad array of indicators and avoiding the rookie mistakes of estimating recession risk....

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