Recession Likely Still More than 3 Years Away, Commerce Trust Co. Economist Says

Scott Colbert


Although U.S. economic growth is slowing after more than 42 quarters of expansion, the start of a recession is still not likely to occur until early 2023, according to Scott Colbert, executive VP, chief economist and director of fixed asset management for Commerce Trust Company.

That being said, uncertainty remains in the air relative to America’s trade war with China and a presidential election less than one year away, he added.

“The trade war with China won’t likely push the U.S. into recession,” said Colbert at Commerce’s 2020 Economic Forecast and Financial Market Update in Clayton on Nov. 6. “Economic recovery has been so slow and gradual that we haven’t created the ‘heat’ of high inflation to push the Fed to hit the brakes and raise interest rates. Once leading economic indicators recover, as they did in March 2017, the economy statistically has six years until the next recession.”

After the Fed followed through on three of four predicted interest rate cuts in 2019, the fourth will likely not materialize until March 2020, Colbert said.

“To have a recession, two things really have to happen,” he said. “One, an anxiety shock such as the Arab-Israeli (oil) War in 1973, the Gulf War in 1990, the dot-com bubble burst in 2000 and the 2008 housing crisis. Two, a Fed that’s braking to control inflation…right now, the Fed is doing the opposite by cutting interest rates to extend the economic recovery.”

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