NAPEO
A strong case can be made that the U.S. has already been through a “pseudo” recession in Q3 and Q4 of 2023. I say “pseudo” because the classic definition of a recession is two consecutive quarters with negative GDP. This obviously didn’t happen as the charts indicate. But what did happen is an inverted yield curve, rising unemployment, a very negative business and consumer sentiment, high interest rates and inflationary pressures. These factors are reflected in all three charts from a small and medium-sized business perspective. The side-ways movement of the PEO index likely reflects, not the veracity of the PEO model, but the underlying negativity of business.
As of the writing of this commentary, the stock market is at or near record highs. The stock market is arguably the best future economic predictor we have. Typically, it looks about nine months to a year in advance. This would indicate that the outlook for both GDP and the business economy is positive. Florida and Texas are also good bellwether states for the country.
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