Listen: Duke University's CFO Survey: Recession Expected by Late 2020
"We just got the release this week of dukes Duke university's quarterly business outlook survey, I guess now that March madness is over the folks are do can think about academia once again. And this survey is a reflection of what I'm describing right now, two thirds of US CFO's think that the US economy will be a recession by the third quarter of two thousand and twenty and eighty five percent of them think that it will happen by no later than the first quarter of two thousand and twenty one now before you take this as a bad omen. It's actually a big improvement over the survey of the same very same folks taken three months ago. Then half of them said that they think that we'd enter recession by the end of this year. And now only about a third of them think it can happen by two thousand twenty. These are the folks who are supposed to have their fingers on the pulse of the economy, certainly on their businesses. They're seeing the leading indicators as they move through their own business channels, and it's their psychology is is truly important for the wellbeing of the economy because just as a deteriorating investor psychology can lead to a sell off in the markets and declining consumer psychology can lead to a decline in retail spending. Well, these folks in the survey or the ones who make decisions about capital investment, deployment, building inventories ordering commodities and those who decide what type of hiring we can expect in the coming quarters well in that regard, a funny aspect of the survey is that while it's less bad than the previous one. And they think we'll be okay for while before challenger so in about a year or so more than a year out by the consensus. They're universally. They all think that their own businesses are doing quite well, and it's just the guys across the street that are going to be feeling this pain in the. Coming year. In fact, they expect capital spending for the next twelve months to grow by eight percent versus with a thought was one percent capital spending growth three months earlier, that means they're going to be deploying a lot more cash into the economy and also they expect wages to grow at over five percent. I don't know if that's an implicit promise to their own employees of such a raise. But they're feeling the pinch of a tighter job market. And because of that last bit I'm a bit more hawkish on the fed on the central Bank. Then the street has suddenly become and that's what's really has changed for the market since December. When it had been then expected that the fed would just keep raising rates gradually, and that they would raise rates three times this year. And now the consensus is that they they're expected to be on hold and I'm not contradicting that. I don't think that they're actually going to be raising rates real soon. They're telegraphing their moves pretty well. These days. But if anyone's been to a restaurant lately or worse, if you tried to hire some labor. Well, good luck. It's hard to come by. And if it's a generally of lower quality, it kind of reminds me of what it was like around here in the late nineties when really anyone who could fog a mirror can get a job in IT or over at AOL or pretty well paying jobs in our region. So the service sector was completely understaffed. And have you noticed that your garbage is being picked up on schedule? Lately. Many of the communities in our region have are having disruptions with waste removal because these companies can't hire enough guys to work on the trucks. The CFO survey expects wage growth above five percent. So with this capital spending and wage growth. We really should see it appearing in the economic data later this"