Is recession looming?

[vand]

Two economies often considered as barometers of the developed markets are struggling:

Australian GDP per captia declines for the first time in 40 years
https://www.abc.net.au/news/2023-12-06/ ... /103194724

Germany economic output falling
https://www.reuters.com/markets/europe/ ... 023-12-07/

These sort of small percentage decline in the macro number often fail to capture the scale of the turmoil going on underneath the surface when you consider how government spending (which isn't really productive) tends to go up during recession.

[Adamski]

It feels like a recession because of high interest rates, inflation and the cost of living crisis. People are feeling the pinch. Also gdp per capita is stagnate and not growing. But with near zero growth we're not technically in a recession without two quarters of negative growth.

[Adamski]

Latest house prices up 0.5% in Nov, down 1% since Nov 22.

Stock market vwrl, 1 year up 10%, back to where it was Nov 21.

Uk gdp growth grew 0.2% 2rd Q 2023. 2024 forecast- no growth.

Hardly a crash is it? A lot of the commentary is sensationalist and scare mongering. We were promised a crash in house prices and stocks, hasn't yet happened.

[swill453]

A smidgin of a santa rally going on too, my portfolio back to where it was in June/July.

Scott.

[Oggy]

Is recission looming? Not yet, but given the calibre of the people who make up our governments, the can may only be kicked down the road so far before it implodes. In the UK at least, there is zero impetus for growth, zero impetus for increasing the very poor productivity and no chance whatsoever of incentivising work. There remains however considerable impetus for spending like no tomorrow and just running up a huge tab with no thought as to how it may be paid off - if it ever will. Taxes will thus remain high in a vain partial attempt to pay for it all, but that will only go so far as you cannot tax your way to prosperity in order to pay off the huge debt.

In short, it would be mad to invest in the UK. For sure there are opportunities for canny folk who know where to look, but for the average Joe, economically at least, the UK is goosed.

[vand]

The question is "is recession looming" not "what is the stock market doing" - the two rarely move in tandem and should not be conflated.

I don't even think that you one should talk about a recession as a fall in a fall in C+G+I+X over 2 quarters, even if that is the widely accepted government/central bank definition. Even when we had that with the US economy they redefined it and didn't recognise it as an official recession.

What really matters, and what people worry about when they hear talk of recession is the state of the labour market and real wages.

[Nimrod103]

Nobody has yet mentioned the M4 money supply figures for UK, which show a catastrophic drop during this year. A very clear warning of trouble ahead
Does the UK Treasury and BoE still think that M4 is meaningless?

[Oggy]

Nobody has yet mentioned the M4 money supply figures for UK, which show a catastrophic drop during this year. A very clear warning of trouble ahead
Does the UK Treasury and BoE still think that M4 is meaningless

Folk - or perhaps more to the point - the electorate, have to get it into their head that the people who govern us and many people in authority are simply chancers. They can talk the talk, but under the veneer of their gushing verbosity is a substrate of polystyrene. Full of holes, no strength and sadly very hard to dispose of.

[ursaminortaur]

Nobody has yet mentioned the M4 money supply figures for UK, which show a catastrophic drop during this year. A very clear warning of trouble ahead
Does the UK Treasury and BoE still think that M4 is meaningless?

Surely falls in M3 and M4, ie shrinking the broad money supply, are the expected result of the BoE policies to attack inflation. Monetarists would probably argue that although inflation has fallen it is still too high and further tightening of the money supply is needed although others would argue that we have had enough of that tightening since the main inflationary pressure were driven by external costs rather than the internal money supply and that those external costs have eased somewhat.

[dealtn]

What really matters, and what people worry about when they hear talk of recession is the state of the labour market and real wages.

No. That might be what some people are concerned about, mostly those that supply labour to the economy, but that's not an exhaustive list of people, many of whom have other recessionary concerns.

[vand]

What really matters, and what people worry about when they hear talk of recession is the state of the labour market and real wages.

No. That might be what some people are concerned about, mostly those that supply labour to the economy, but that's not an exhaustive list of people, many of whom have other recessionary concerns.

Yes.

It's a pretty exhaustive list when you consider that:

- there are 33m workers out of a working age population of 38m in the UK
- those who don't work but receive benefit are only able to do so because others do work

Take those groups away any what are you left with?

[dealtn]

No. That might be what some people are concerned about, mostly those that supply labour to the economy, but that's not an exhaustive list of people, many of whom have other recessionary concerns.

Yes.

It's a pretty exhaustive list when you consider that:

- there are 33m workers out of a working age population of 38m in the UK
- those who don't work but receive benefit are only able to do so because others do work

Take those groups away any what are you left with?

People that own businesses, people that are retired, people that are under the age of the working population, people that rely on savings, or on investments, or on property ....

[servodude]

Yes.

It's a pretty exhaustive list when you consider that:

- there are 33m workers out of a working age population of 38m in the UK
- those who don't work but receive benefit are only able to do so because others do work

Take those groups away any what are you left with?

People that own businesses, people that are retired, people that are under the age of the working population, people that rely on savings, or on investments, or on property ....

So they're not mostly worried about unemployment during a recession? About their clientele (and business)? about their family, parents (breadwinners)? about how it reflects on and affects the companies they are invested in? About who they might rent property to?
I do think it impacts all those aspects and might generally be considered a/the main concern during a recession - as an indicator, result and cause

I would be interested in why you don't?
What else has such a wide ranging and direct impact on so many aspects during a recession?

[Nimrod103]

Anyway, no sign yet of a recession (https://order-order.com/2023/12/12/uk-w ... ps-to-7-3/). and good to see the idle getting back to work. It just needs some more public sector workers to turn up to the office, and the abnormality of the last 4 years might disappear:

New data from the Office for National Statistics (ONS) shows UK wage growth slowed in the three months to December to 7.3%, down from record highs of 7.8% in September. Public sector wage growth is at some of the highest levels since records began at 6.9%. That should suffice to convince the Bank of England to hold rates at 5.25% on Thursday…

Unemployment is unchanged still at lows of 4.2%, as is the employment rate at 75.7%. Vacancies dropped again, now for the seventeenth consecutive month. The rate of economic inactivity fell to 20.9% one-in-five of the potential workforce…

[funduffer]

Anyway, no sign yet of a recession (https://order-order.com/2023/12/12/uk-w ... ps-to-7-3/). and good to see the idle getting back to work. It just needs some more public sector workers to turn up to the office, and the abnormality of the last 4 years might disappear:

New data from the Office for National Statistics (ONS) shows UK wage growth slowed in the three months to December to 7.3%, down from record highs of 7.8% in September. Public sector wage growth is at some of the highest levels since records began at 6.9%. That should suffice to convince the Bank of England to hold rates at 5.25% on Thursday…

Unemployment is unchanged still at lows of 4.2%, as is the employment rate at 75.7%. Vacancies dropped again, now for the seventeenth consecutive month. The rate of economic inactivity fell to 20.9% one-in-five of the potential workforce…

At 20.9% the inactivity rate is actually similar to Germany's and below most of Europe.

https://www.statista.com/statistics/125 ... y-country/

Despite the rhetoric and government's gnashing of teeth, we are not too bad on this metric.

FD

[Nimrod103]

Anyway, no sign yet of a recession (https://order-order.com/2023/12/12/uk-w ... ps-to-7-3/). and good to see the idle getting back to work. It just needs some more public sector workers to turn up to the office, and the abnormality of the last 4 years might disappear:

New data from the Office for National Statistics (ONS) shows UK wage growth slowed in the three months to December to 7.3%, down from record highs of 7.8% in September. Public sector wage growth is at some of the highest levels since records began at 6.9%. That should suffice to convince the Bank of England to hold rates at 5.25% on Thursday…

Unemployment is unchanged still at lows of 4.2%, as is the employment rate at 75.7%. Vacancies dropped again, now for the seventeenth consecutive month. The rate of economic inactivity fell to 20.9% one-in-five of the potential workforce…

At 20.9% the inactivity rate is actually similar to Germany's and below most of Europe.

https://www.statista.com/statistics/125 ... y-country/

Despite the rhetoric and government's gnashing of teeth, we are not too bad on this metric.

FD

I wish Statista would use accurate titles. This one says "Share of population economically inactive in European countries in 2022", so it isn't clear who is included and who excluded. The title suggests it is a % of total population so would be distorted by children and pensioners.

[Oggy]

There are lies, damn lies, and statistics. With a few exceptions, data can be manipulated to say anything folk want it to say, or those presenting the data will simply pursue their own (highly debatable) agenda from it. As such, I don't take much notice of the plethora of charts and data pumped out by governments, the media, ONS, or even that of the many financial companies available to the investor. In terms of the economy in general, I prefer to observe how folk and business are doing in these times of cripplingly high prices in energy, food, transport, housing, clothing, council tax, etc., an increasingly low wage economy for many millions, a lack of quality jobs, State spending out of control, high taxes, and increasing millions of folk who rack up huge amounts of debt - much of it unserviceable. This is the reality of the economy, and whilst there is no recession - yet - I fear the UK economy is no longer built on solid foundations and is simply in survival mode. Radical change is required - and has been for decades - but no government is prepared to do it. Managed decline/damage limitation is the policy and folk should plan accordingly.

[funduffer]

I wish Statista would use accurate titles. This one says "Share of population economically inactive in European countries in 2022", so it isn't clear who is included and who excluded. The title suggests it is a % of total population so would be distorted by children and pensioners.

If you took the trouble to read just below the bar chart it says:

In Europe, Italy and Romania have the highest percentage of economically inactive population. In Italy, more than one third of all people aged 15 to 64 years were inactive during the third quarter of 2022, while in Romania they added up to 32.9 percent. On the other hand, less than 15 percent of the adult population in Iceland was economically inactive. Economic inactivity means they were neither unemployed not employed.

Also, countries where the definition differs slightly are shown with an asterisk.

FD

[dealtn]

There are lies, damn lies, and statistics. With a few exceptions, data can be manipulated to say anything folk want it to say, or those presenting the data will simply pursue their own (highly debatable) agenda from it. As such, I don't take much notice of the plethora of charts and data pumped out by governments, the media, ONS, or even that of the many financial companies available to the investor. In terms of the economy in general, I prefer to observe how folk and business are doing in these times of cripplingly high prices in energy, food, transport, housing, clothing, council tax, etc., an increasingly low wage economy for many millions, a lack of quality jobs, State spending out of control, high taxes, and increasing millions of folk who rack up huge amounts of debt - much of it unserviceable. This is the reality of the economy, and whilst there is no recession - yet - I fear the UK economy is no longer built on solid foundations and is simply in survival mode. Radical change is required - and has been for decades - but no government is prepared to do it. Managed decline/damage limitation is the policy and folk should plan accordingly.

So without reference to those statistics and data how are you assessing that is the state of the economy through your observations?

[Oggy]

So without reference to those statistics and data how are you assessing that is the state of the economy through your observations?

Er...by my observations mentioned and other indicators - in the much same way that I would observe I am reasonable healthy as I a can still play badminton and run around a bit without recourse to pulling data from a fitbit.