Forward Guidance
Breaking Down The Current Business Cycle | Eric Basmajian
Oct 22, 2024
Eric Basmajian, founder of EPB Research and an expert in macroeconomic forecasting, dives into the intricate world of the business cycle. He reveals how the cyclical economy affects everything from GDP numbers to the housing sector. The discussion explores labor market dynamics, emphasizing jobless claims and the gig economy's impact. Basmajian unpacks the complexities of non-farm payrolls and revisions, while also tackling the Federal Reserve's neutral rate and its implications for monetary policy.
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Quick takeaways
- The business cycle involves fluctuations marked by periods of expansion and recession, influencing various sectors of the economy differently.
- Current economic resilience is notable despite contractions in leading indicators, reflecting delays in their impact on the broader cyclical economy.
Deep dives
Understanding Business Cycles
A business cycle represents the fluctuations in economic activity over time, characterized by periods of expansion and recession. The process of tracking these cycles involves categorizing data into four major buckets: leading, cyclical, aggregate, and lagging. Each sector of the economy reacts differently at various stages of the business cycle, influencing the overall economic landscape. This structured approach allows analysts to predict movement within the broader economy based on the performance of these distinct sectors.
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