In recent months, I've repeatedly noted that while recession risks were gradually increasing, there was not sufficient evidence to expect an imminent economic downturn. Most economists still believe this. On Saturday, the consensus of economists surveyed by Blue Chip Economic Indicators indicated expectations that growth will be sluggish into next year, but that there will be no recession. Unfortunately, the economic consensus has never accurately anticipated a recession. For my part, the outlook has changed. I expect that a U.S. economic recession is immediately ahead.I'm a fan of economics. I, personally, find it fascinating. What I try to remember though, is its limits. Hiring economists to make consensus predictions about the future has proven to be far less reliable than predicting the weather - and studying weather has centuries of empirical data to back it up while economics does not.
The irony is, of course, that I make economic predictions. So far I seem to be good in terms of predicting what will happen rather more accurately than when it happens. That, I think, is the best course.
And as for predicting weather, I'm still very much an interested amateur.
(h/t Calculated Risk)
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