Monday, October 23, 2017

Clear Sailing

As a long-time member of the National Association of Business Economics, I follow their surveys closely.  In their latest, it is clear they see no prospect of recession during the next two years.  Here are some thoughts:

Look at the sharp rise in earnings from the third quarter (Q3) of this year to the next quarter.  Obviously, other members are more optimistic than I am, and I hope they are right.

Also, notice the declining growth in earnings while sales remains relatively flat.  That is a normal behavior for later stages of the business cycle.  But, we are not near the end of the business cycle.