Home Guides & Resources chevron_right Investing Assessing the Likelihood of Recession Published February 3, 2020 https://www.adviserinvestments.com/wp-content/uploads/qw0120-recession-01.mp3 We’re constantly assessing the bevy of economic reports released each week for signs of weakness. Chief Investment Officer Jim Lowell and Vice President Steve Johnson discussed their approach to data analysis in our recent quarterly webinar*: 2020 Conflicts—Impeachment, Tariffs & Global Dysfunction. Please enjoy the excerpt below and click here for the full webinar replay to hear more. Steve Johnson: We look at each indicator that comes in, we look at all the economic news, but definitely we’re going to give more weight to those reports that show the health of the consumer. As we know, consumer spending makes up more than 70% of the economy. And as goes the U.S. consumer, really so goes the economy. So as a result, we want to focus on the health of the consumer. We want to look at their job status. Steve Johnson: So we want to look at initial jobless claims, continuing jobless claims, average weekly hours, look at their wages, and look at things like retail sales. And as Jim alluded to, any signs of a weakening trend in these reports would give us some caution. But right now we’re seeing the consistency throughout in those numbers. So right now, as [Chairman] Dan [Wiener] alluded to, we are seeing slow growth, not no growth at this point. Jim Lowell: So Steve, what about the global consumer? We talk about the U.S. consumer a lot. Does the global consumer impact our thinking about not just global markets, but the U.S. market as well? Steve Johnson: Without a doubt, Jim. I think that’s really been the one thing that is befuddled investors, and as Dan and [Director of Research] Jeff [DeMaso] alluded to pundits, we’ve seen a slowdown across the world, and yet the U.S. consumer has remained extremely resilient. So we look at unemployment numbers here in the U.S., we look at wage growth, we look at retail sales, and really the U.S. consumer has done extremely well. Steve Johnson: We looked at housing. The housing numbers last week were extremely robust and yet we’re seeing kind of this slow growth in Europe. We’re seeing the issues that China’s had. And so the U.S. has been the place where people have put the money based on the strength of that consumer. * * * * * Click here for a replay of 2020 Conflicts—Impeachment, Tariffs & Global Dysfunction. Please contact us at (800) 492-6868 to learn more about comprehensive wealth management solutions. *Webinar recorded after the market closed on January 23, 2020. Disclaimer: This material is distributed for informational purposes only. The investment ideas and opinions contained herein should not be viewed as recommendations or personal investment advice or considered an offer to buy or sell specific securities. Our statements and opinions are subject to change at any time, without notice and should be considered only as part of a diversified portfolio. Mutual funds and exchange-traded funds mentioned herein are not necessarily held in client portfolios. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed. You may request a free copy of the firm’s Form ADV Part 2A, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged. Past performance is not an indication of future returns. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice, nor sell insurance products. Always consult a licensed attorney, tax professional, or licensed insurance professional regarding your specific legal or tax situation, or insurance needs. © 2020 Adviser Investments, LLC. All Rights Reserved.