FREE

MOSL: ECOSCOPE-Is US economic recovery really maturing? Anemic recovery could extend current expansion period until 2021

ECOSCOPE: Is US economic recovery really maturing? Anemic recovery could extend current expansion period until 2021

 

• An analysis of the US business cycles confirms that the median length of the economic expansion periods since 1850s is 30 months. However, the median length of the last three expansions has increased almost threefold to 92 months, and the current expansion period has extended even further to 108 months - the second-longest expansion since the mid-19th century. This has fuelled fears about a US recession in 2019 among market participants.
• We, however, argue that the pace of expansion is at least as important, if not more, as the duration of expansion. Thus, considering the anemic nature of the ongoing expansion, the US economic recovery may be - at most - only about two-third complete, with possibly more than three years of continued expansion ahead. If so, we believe that it is too early for investors to worry about US expansion reaching maturity.