U.S. Is in Recession If History of Consumer Sentiment Repeats

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(Bloomberg) — A decline in consumer expectations suggests the U.S. economy is in recession even though employment and wage growth indicate otherwise, according a new study co-authored by a former Bank of England policy maker.

In the research dated Thursday, David Blanchflower of Dartmouth College — who set interest rates at the BOE during the 2008 financial crisis — and Alex Bryson of University College London say that consumer expectations indexes from the Conference Board and University of Michigan tend to predict American downturns 18 months in advance.

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The Conference Board’s gauge of expectations dropped in September to the lowest since November last year, although the University of Michigan’s gained.



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