“If GDP dips below 2 percent on real basis, you go into recession,” Yamarone said at the Altegris event. “It’s like riding a bike--you tip over” without sufficient momentum.
The same situation holds for retail sales and personal incomes, he said, where the data show growth below 2 percent.
“It’s an income problem,’ Yamarone said. Spending power among the middle class “has eroded. It’s just a matter of time before people put off spending. … That’s why we’re prone to recession.”
Rosenberg said the labor market is tightening, so wages could be heading up in the next few years.