How We Know a Recession Isn't Imminent, in One Graph
NEW YORK (
TheStreet) -- Household wealth matters -- for economies, and for societies. It's a key measure of a country's prosperity.
But it turns out it's also a darned good predictor of recessions.
Since the 1960s, every American recession has been preceded by a year-over-year decline in the real value of household assets. The Fed's Thursday release of fourth-quarter 2013 Flow of Funds data shows that no such decline is currently apparent. Quite the contrary: Household assets are still rising rapidly.
The picture has been similar for real household net worth -- assets minus liabilities -- they're also rising rapidly. (Okay, that's two graphs, but who's counting?)
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