Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
November 26, 2014

Why There Won't Be a Recession in 2013

Concerns of a renewed recession in 2013 are overblown, according to Bill McBride, so long as lawmakers avert the “fiscal cliff.”

“This is important to follow because residential investment tends to lead the economy… The key downside risk for the US economy in 2013 is too much austerity, too quickly.   However, barring a policy mistake (I expect a fiscal agreement), it seems unlikely there will be a sharp decline in private investment in 2013.”

“This is because residential investment is already near record lows as a percent of GDP and will probably increase further in 2013, and  that suggests the US will avoid a new recession in 2013.”

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