by Calculated Risk on 12/22/2015 07:24:00 PM

From Matt Busigin at Macrofugue: US Recession Callers Are Embarrassing Themselves

Through a combination of quackery, charlatanism, and inadequate utilisation of mathematics, callers for US recession in 2016 are embarrassing themselves. Again.

The most prominent reason for recession calling may well be the Institute of Supply Management’s Manufacturing Purchasing Manager Index. The problem with this recession forecasting methodology is that it doesn’t work.

CR Note: Usually there is a reason for a recession such as a bursting bubble or the Fed tightening quickly to fight inflation. Currently the recession callers seem to focus mostly on global weakness and the strong dollar. That has pushed U.S. manufacturing into contraction (along with low oil prices), but I don't think it will push the US economy into recession. Oh well, someone is always predicting a recession and they are usually wrong (I did forecast a recession in 2007, but I was on recession watch because of the housing bubble).  Right now I'm not even on recession watch.

Wednesday:
• At 7:00 AM ET, the Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 8:30 AM, Durable Goods Orders for November from the Census Bureau. The consensus is for a 0.5% decrease in durable goods orders.

• Also at 8:30 AM, Personal Income and Outlays for November. The consensus is for a 0.2% increase in personal income, and for a 0.3% increase in personal spending. And for the Core PCE price index to increase 0.1%.

• At 10:00 AM, New Home Sales for November from the Census Bureau. The consensus is for a increase in sales to 503 thousand Seasonally Adjusted Annual Rate (SAAR) in November from 495 thousand in October.

• Also at 10:00 AM, University of Michigan's Consumer sentiment index (final for December). The consensus is for a reading of 91.9, up from the preliminary reading 91.8.