LAS VEGAS – The auto finance industry can breathe a sigh of relief as the Federal Reserve Bank of Chicago’s William Strauss discounted the likelihood of a recession to start next year.
“What causes us to go into a recession is some sort of bad event… and it has to be a bad economic event that it rises to the level that it can take down overall activity in the United States,” Strauss, the senior economist and economic advisor, said during the Auto Finance Summit economic forecast. “Right now I’d say we haven’t seen such events,” he noted, adding that such events in the past include the housing bubble burst in 2008, Sept. 11 in 2001, and the start of the U.S. war in Iraq in 1991.
The U.S. economy has experienced a growth period, at an average pace of 2.3%, that has lasted 10 years. In fact, “the outlook is for the growth to continue,” Strauss said. Almost all real-side economy sectors still have room to expand, he noted. “There’s still slack in the economy and, therefore, there’s less of a risk of a downturn coming from within the United States.”