by Patrick Fearon-Hernandez, CFA  | PDF

One of the most striking aspects of today’s world economy, and the United States economy in particular, is its ability to keep growing despite confidence-shaking events such as the US’s waning geopolitical power, large-scale wars, fracturing trade relations, global supply disruptions, an aging population, the coronavirus pandemic, persistent price inflation, dramatic policy change, and the rise of populist politics. In spite of all these challenges, gross domestic product (GDP) continues to expand, even after stripping out the impact of price changes.

GDP growth isn’t necessarily strong at the moment. In fact, in most key countries, it’s sitting below the long-run average rate. All the same, the continued expansion and lack of recessions would be expected to have big implications for consumers, businesses, and investors. Focusing on the US, this report examines why recessions have become so rare and what the implications might be for financial markets and investment strategy going forward.

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