Economists are bad at predicting recessions

“Very, very few recessions have been predicted nine months or a year in advance,” Prakash Loungani, an economist at the International Monetary Fund, told me.

This doesn’t mean a recession won’t strike in the near future. Over the past few weeks and months, there have been some worrisome signals about the country’s economic health, fueling broader concerns about an impending recession. But exactly when the next economic downturn will come — and specifically whether it will interrupt the 2020 election cycle — is extremely uncertain. “There’s no economic data or research or analysis that suggests we can look 12 months into the future and predict recessions with any confidence,” said Tara Sinclair, a professor of economics at George Washington University.

Instead, and despite the recent rash of stories about economists’ predictions, economic downturns usually come as a surprise. A 2018 study conducted by Loungani and others looked at 153 recessions in 63 countries between 1992 and 2014 and found that the vast majority were missed by economists in both the public and private sector. This was painfully true in the case of the global financial crisis in 2008, which wasn’t officially declared a recession until it had been going for almost a year. Other studies have found that in general, forecasters are too sunny about economic growth.