Since the financial crisis, the economy has never been called robust, but it may be in the longest expansion on record, with a couple more years to go.
Goldman Sachs economists said, in a recent note, that their model shows an increased, 31 percent chance for a U.S. recession in the next nine quarters. That number is rising. But it’s a good news, bad news story, and the good news is there is now a two-thirds chance that the recovery will be the longest on record.
“The likelihood that the expansion will break the prior record is consistent with our long-standing view that the combination of a deep recession and an initially slow recovery has set us up for an unusually long cycle,” they wrote.
The current expansion has already lasted 95 months, now third-longest in US history in 33 business cycles going back to 1854, the economists said.
“Only the expansions from March 1991 to March 2001 [120 months] and from February 1961 to December 1969 [106 months] were longer,” they wrote.
The Goldman economists also say the medium term risk of a recession is rising, “mainly because the economy is at full employment and still growing above trend.” They define a recession as a quarter of negative growth.
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