Strong US labor market suggests economy not in recession, but does not invalidate recession forecasts over the medium term - Alex Domash and Lawrence H. Summers

August 1, 2022, Opinion: "In March 2022, we predicted a high probability of recession over the next 12 to 24 months given the high level of inflation and low level of unemployment in the economy. High inflation and low unemployment are both strong predictors of future recessions: since the 1950s, every time inflation has exceeded 4 percent and unemployment has been below 5 percent, the U.S. economy has gone into a recession within two years. Given this empirical evidence, we argued that the probability of a US soft landing for the economy was very low." Read Via Medium

HKS MRCBG Afilliate - Alex Domash
HKS Faculty Author - Lawrence H. Summers