Recently, you may have seen news headlines predicting the next recession. The economy has been growing since 2009, the longest stretch in US history. Since the economy is cyclical, it’s only natural to wonder when the economy will begin to retract.
Causes of a downturn. Recessions are often caused by unforeseen events or circumstances that shock the market. Sixty-two percent of expert say an overheating economy will lead to the Fed tightening its belt. Others say a financial meltdown may be caused by as asset bubble, fiscal crisis or international trade disruptions.Reason to be optimistic. Housing isn’t likely to play a large role in the next recession. Although affordability remains a concern in many areas of the country, experts say that housing is unlikely to cause another recession.
Take headlines with a grain of salt. Experts predicted recessions in 2011 and 2016 and neither transpired. It is important to remember that growth doesn’t last, so a downturn would be considered natural. Over the next year, economists predict the Gross Domestic Product (GDP) will continue to grow and unemployment rates will fall further. The risk of recession in the next year is only about 15 percent and the changes to the tax code effective this year are expected to drive business investment spending.