US RE­CES­SION? AL­MOST NO CHANCE

Shares - - STORY IN NUMBERS -

THERE IS VIR­TU­ALLY no chance of the US econ­omy plung­ing into re­ces­sion dur­ing the next 12 months, say eco­nomic strate­gists at in­vest­ment bank UBS.

The an­a­lysts in­put many hard and soft data points into their model and find that a ‘US re­ces­sion prob­a­bil­ity is still close to zero’.

Hard data is fact based; num­bers, sta­tis­tics and charts, say. It takes me 40 min­utes to get to work in the morn­ing, for ex­am­ple. Soft data is sub­jec­tive and highly vari­able. I think it is quicker to get the tube to work rather than the bus.

‘Al­though the gap be­tween hard and soft data is large, the im­plied re­ces­sion prob­a­bil­i­ties are ac­tu­ally in sync and show no signs of a slow­down ahead,’ says UBS.

That’s good news for in­vestors ev­ery­where given the size of the US econ­omy and the ram­i­fi­ca­tions for a slow­down rip­pling else­where. When the US sneezes, ev­ery­one catches a cold, as the say­ing goes.

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