CEO of Twitter, Jack Patrick Dorsey, speaks during an exclusive interview with Hindustan Times at Twitter India office, at the Crescent, on Nov. 14, 2018 in New Delhi, India.
Burhaan Kinu—Hindustan Times via Getty Images
By Alan Murray and David Meyer
April 24, 2019

Good morning.

I confess to being one of the people hawking recession fears at the beginning of this year. And in fact, it seems I did the same at the beginning of last year. In both cases I was wrong; the economy seems to be barreling along just fine, thank you very much.

My error was based in the study of history, not economics. Economists insist that expansions don’t die of old age. But history suggests they do, indeed, die. And this one, about to turn ten years old, is reaching a record-setting age.

So when will we know the end is finally here? My Fortune colleagues have ferreted out five key indicators that will herald the onset. Take my predictions with a bucket of salt; but take theirs seriously. The five indicators to watch:

  • The yield curve. When the interest rate on three month Treasuries is higher than that on ten year Treasuries, take heed. The yield curve inverted for five days in March; a more prolonged inversion would mean trouble.
  • Auto loans. Could auto loans spark this cycle’s equivalent of the subprime crisis? Maybe. Keep a close eye on delinquency rates.
  • China’s consumers. They have been the engine of this economic cycle. But the drop in iPhone sales suggests they are losing steam. That could be the beginning of the end.
  • Corporate debt. Business debt now totals $66 trillion, up from $29 trillion before the financial crisis. If interest rates ever head north, that’s going to be a problem.
  • Corporate profits. As wages rise, profits may fall, and that could crimp growth. Count me as skeptical, though, that a profit recession would prompt a general recession.

You can read the full Fortune story on how to predict the next recession here. News below.

Alan Murray
@alansmurray
alan.murray@fortune.com

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