Strategas: "6 Main Reasons There's Still Time In This U.S. Cycle"

Released: 2/4/2019:

1. Nonfarm payroll growth is experiencing a second wind.

Relevance: On average, only after growth decelerates 2 years does a recession typicaly occur.

2. Labor's share of GDP is meandering higher.

Relevance: On average, labor share of GDP bottoms 3 years before a recession.

3. Wage growth (averge hourly earnings) is still below 4% y/y.

Relevance: Even once wage growth acceslerates to 4%, on average, it is over 2 years before a recession.

4. The yield curve path is unfolding like


Relevance: On average, the US 2/10 yield curve inverts 1.5 years before a recession.

5. Consumer confidence is falling from exogenous events, but that looks to reverse.

Relevance: On average, consumer confidence plummets 1 year before a recession.

6. PMIs peaked in August 2018.

Relevance: PMI gives (on average) a 3 year lead time.