Think Recession Fears Are Overblown? You Need to Read This

Friday’s positive jobs report — which far exceeded expectations — would seem to suggest that recession fears have been a bit overblown. At the very least, it adds yet another contradictory data point to a baffling collection of economic indicators.

Perhaps this means the US may avoid a recession for the foreseeable future. But be careful reading too much into a single data dump. Turning points in the business cycle are often defined by perplexing, contradictory data that can take many months to resolve.

Consider, for example, what happened nearly 50 years ago, as the US slid into a recession. No one at the time knew this with any certainty. Much like today, they fumbled around, trying to make sense of utterly confusing, contradictory signals generated by the paradoxical convergence of high inflation, a resilient job market and pervasive pessimism.