Recession in 2016? Not Likely

Recent volatility on Wall Street in oil markets and problems in China are stoking fears.
The R word is back in the headlines.
But let’s put aside any forecasts of imminent economic disaster for now and take a deep breath.
The sky is not falling.
Yes, Moody’s has upped the probability that our economy will fall into a recession over the next six months, raising the risk from 13 percent (in November) to 16 percent (in December).
Hardly cause for alarm.

In a far likelier scenario, the U.S. economy will grow at a rate of 2.5 percent this year, with no recession.
While there are definite losers in the economy--think oil producers in the central United States--by and large, Main Street and consumers are doing just fine.
Credit is abundant, and there's moderate growth in jobs and in the housing market.
Certainly we need to be vigilant in the next few years, particularly if China continues to decline, but for now, let's stay the course.

---

Pete Gioia is an economist with CBIA. Follow him on Twitter @CTEconomist.