Talk Of U.S. Recession Non-Existent
Corporate executives generally try to stay away from the “R” word (recession) when talking to investors and this Corporate Beige Book exercise confirms that. In fact, the average number of times the word recession was uttered during the conference calls aggregated over the past six quarters was a whopping 9. Mentions ticked up to 15 during the second quarter calls, but several of them were related to overseas economies including a potential recession in the U.K. (a staffing company), and recessions in Brazil (media, credit card processor, and industrial equipment companies) and Russia (consumer products company). Other comments were hypothetical, such as an automotive business suggesting that a potential 10–15% drop in auto sales would require a significant recession.
In the U.S., we continue to see low odds of recession over the next 12–18 months (potentially about 20%) when factoring in the economic data and risk of a potential policy mistake from a central bank or a government.
