CUMBERLAND — The U.S. economy has about a two-thirds chance of experiencing a recession before the end of this year, a Kennesaw State University economist told businessmen and women Wednesday.
Roger Tutterow, an economics professor and director of the Econometric Center at KSU, said the economy would more than likely experience a “mild correction” in 2023 at Synovus bank’s annual economic forecast breakfast at the Cobb Energy Performing Arts Centre.
Tutterow displayed a graph with data from economic think tank The Conference Board that showed leading economic indicators on a downward trajectory. The index aggregates 10 series of data which “turn up before expansions and down before recessions,” in Tutterow’s words.
The indicators have fallen for eight consecutive months, and the six-month moving average is down 4.2%.
“We have never had that significant of a drop in the (leading economic indicators) and not had a subsequent recession,” Tutterow said.
Last April, Tutterow said he forecasted a 30% risk of recession before the end of 2023. By August 2022, his forecasted risk had grown to 40%. By the end of last year, he had raised it to “about two-thirds.”
His advice to the crowd? Don’t panic.
“I think it’s fair to say that the risk of a recession over the next 12 months is elevated,” Tutterow said. “So we make some choices about maybe hoarding a little bit of cash, maybe not deploying capital as quickly as we might otherwise do.
“But what you can’t do is allow what should be a relatively mild correction to pull you off your long-term strategic plan. You have to manage in a way that allows you to be a little bit more measured in activities that you take, particularly the first half of this year. But I do think you still need to be focused on the longer term outlook and creating comparative advantage, vis-a-vis…
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