One for the Record Books
By: John S. Weitzer, CFA
Senior Vice President and Chief Investment Officer
Jul 23, 2019 | 4 min. read
The current economic expansion is now the longest in U.S. history. Does that mean the next recession is around the corner?
The U.S. recession caused by the Great Financial Crisis officially ended on June 30, 2009. As of July 1, the current economic expansion – defined as a period of positive economic growth – is now the longest in U.S. history. This much maligned and doubted economic expansion is truly one for the record books!
Take a look at the table below that shows the four longest economic expansions in U.S. history:
Although the longest on record, the current expansion has only increased U.S. economic output by around 25 percent. This slow growth makes it one of the weaker economic expansions in U.S. history. Although old in terms of the calendar, this expansion is showing no immediate signs of stopping. Business expansions do not die of old age. They die from excess. So given that we have not had a “boom,” or period of robust economic growth, we may not see the “bust” for a period of time.
Let’s quickly review and address some signs of excess that have historically heralded an oncoming recession.
Currently, we do not see signs of excess in the U.S. financial system. Banks are not restricting lending and the absence of inflation makes it unlikely that the Federal Reserve will see the need to raise still-low interest rates. The bottom line is that this economic expansion has been going on for a long time and could very well extend even further. Maybe this is truly a case of “no boom, no bust.”
 Or, at least since 1854 when it began being tracked.
 National Bureau of Economic Research (www.nber.org).
 Through 3/31/2019.
 In his book, “Predicting the Markets (2018),” Ed Yardeni explains that one of the major lessons that he learned during the first 40 years of his career on Wall Street was that where there is no “boom,” you will not get a “bust.”
The information in this report was prepared by John Weitzer, Chief Investment Officer of First Command. Opinions represent First Command’s opinion as of the date of this report and are for general informational purposes only and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally. First Command does not undertake to advise you of any change in its opinions or the information contained in this report.
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