Longbrake Letter

April 2019

The gloomy mood at the beginning of 2019 has given way to renewed optimism that economic activity in the United States and around the world will improve as 2019 progresses. This sentiment shift can be traced to easing of U.S. monetary policy, easier financial conditions and Chinese policy stimulus. However, economic activity continues to deteriorate in Europe and Japan. Significant risks persist, but the probability of recession in the next few months has diminished. Read the letter.

March 2019

In his March assessment of the U.S. and global economic outlook for 2019, Maryland Smith's Bill Longbrake observes that U.S. monetary policy easing has reduced the threat of an imminent U.S. recession. However, significant risks remain. Growth continues to slow across the globe with recession risks rising in Europe and Japan. Most expect policy intervention to reverse China’s growth slowdown in coming months, which, if successful, (and that's far from certain), would bolster global economic activity. Read the assessment.

In the March Longbrake Letter, Bill Longbrake updates the discussion of U.S. and global risks that could precipitate recession. While he maintains a “recession watch,” he cautions that the timing of onset is uncertain and it remains possible that policymakers will be able to manage risks and engineer an extended economic expansion in the U.S. Longbrake also examines recent developments in consumer spending, business investment, housing, employment and monetary policy in the March letter. Read the letter.

February 2019

In February’s update to the 2019 outlook, Bill Longbrake describes expected economic outcomes for the U.S. and global economies during 2019 and developments during the first six weeks of the year. He also summarizes risks to the outlook, most of which are negative, although monetary policy risk in the U.S. has moderated. While most analysts expect another good year, but somewhat slower growth, recession risks remain significant. Read the letter.

January 2019

In January’s economic commentary, Bill Longbrake places the U.S. economy on recession watch. Conditions are developing that could lead to recession in the next few months, but those conditions could evolve in ways that keep the U.S. economy on firm footing for a long time to come. Bill examines those risks. He then shows simulations of what could happen to key economic measures, if a recession occurred starting in the fourth quarter. Read the letter.

As was the case in 2018, above potential economic growth continues to be a global theme. However, reflecting growth deceleration in  the second half of 2018, over the course of 2019, global growth is expected to slow gradually and converge to its long-run potential level by the end of the year. Read the letter.

Above potential economic growth continues to be a global theme as global and world economies benefited during 2018 from years of easy monetary policy. Practically all economies grew above potential. However, as 2018 came to a close, global growth momentum decelerated. The slowdown was particularly notable in Europe, China, and emerging economies, particularly those dependent on exporting commodities. Read the outlook assesment.