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U.S. Housing: No Recession Here – October 7, 2019

U.S. Housing: No Recession Here

Government bond markets are discounting a grim economic and inflation outlook. Conversely, equity and commodity markets are somewhat less concerned, albeit trends are soft, at best treading water, outside of U.S. large-cap stocks.

Global economic data in the past week or so confirmed that the overall slowing trend is still intact, although the service and consumer sectors are fairly stable (even in the euro area!), at a time when manufacturing and trade are contracting. The outlook may well hinge on political developments, with the latest threat being the presidential impeachment inquiry in the U.S.

Lastly and somewhat contrarily, lost amidst the recession hysteria is the fact that even with a contraction in manufacturing and trade, the U.S. housing market is undergoing a revival after last year’s rising interest rate-induced slowdown. The U.S. economy has never entered a recession with housing market activity on an improving trajectory.