Is the 'Most-Anticipated' US Recession in History Still on the Horizon?

investing.com:

Late last year, and into early 2023, the crowd was all in on the inevitability of a US recession starting in the near future. A Bloomberg headline captured the zeitgeist as the new year dawned: “The Most-Anticipated Downturn Ever.” But as September draws to a close, the current business-cycle nowcast continues to indicate low risk as the economy chugs along.

To be fair, there’s always another recession on the horizon. The uncertainty is always a matter of two items: timing and depth. The good news is that a number of analytical techniques have reduced some of the mystery on the former in terms of nowcasting and forecasting for the very near future. On that front, there’s still a solid case for estimating a low level of recession risk. There are new clouds on the horizon beyond a month or so, but it’s premature to say with confidence whether that’s noise or signal.

Let’s start with the current scenario. First up: it’s looking increasingly likely that the upcoming third-quarter GDP report for the US will post a moderate gain if not accelerate relative to Q2’s 2.1% increase. As noted last week, recent nowcasts from a range of sources reflect a median nowcast of 3%-plus growth for Q3 GDP.

Economic activity in August slowed, according to the hard-data profile via the Chicago Fed’s National Activity Index. But the expansion, although easing to a modest below-trend pace last month, is still nowhere near recession conditions, according to this business-cycle benchmark.

Meanwhile, the New York Fed’s Weekly Economic Index rose to the highest level of the year, based on data through Sep. 16. The relative strength suggests that the weaker August profile is on track to stabilize and possibly rebound this month.

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