by Lance Roberts at RIA Advice
No recession. That was the recent declaration from Treasury Secretary Janet Yellen, noting that consumer spending, industrial output, credit quality, and other indicators don’t suggest economic risk.
“You don’t see any of the signs. A recession is a broad-based contraction affecting many sectors of the economy. We just don’t have that. We’ve cut the deficit by a record one and a half trillion dollars this year. We’ve seen gas prices come down by about 50 cents in recent weeks, and there should be more in the pipeline. And hopefully, we will pass a bill that will lower prescription drug costs and maintain current levels of health care costs.”
Before we dig into recession risk, there are quite a few fallacies in Yellen’s statement. Industrial output is collapsing, as shown by our Economic Output Composite Index, which comprises more than 100 manufacturing and service-sector data points…
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