Why US recession forecasts have been wrong for years

Published On Aug 29, 2024, 5:00 AM

The article discusses the ongoing challenge of accurately predicting recessions, highlighting that many well-known economic indicators, such as the Leading Economic Index, inverted yield curve, and the Sahm Rule, have failed to reliably forecast downturns. Although these indicators suggested a recession in 2022, the economy has not entered a recession, leading economists to question the effectiveness of these tools. The complexity of economic conditions, especially after disruptions like the pandemic, has resulted in many false signals from these indicators. Leading economists express skepticism about the possibility of a perfect indicator, noting that economics is inherently unpredictable.