While many markets have begun to stabilize and volatility has receded a bit, the risk of recession has edged up rather than eased. Wall Street Journal staffer Greg Ip explains the contradictory signals between markets and the economy, and how recession can linger on the horizon.
Ip notes that J.P. Morgan has set about a 32% odds in favor of the economy falling into recession at some point during the next 12 months. He includes that despite the financial markets showing positive signs, these probabilities have not receded:
Some indicators, such as surveys of factory purchasing managers, remain in recession territory. Much, of course, will depend on today’s release of February nonfarm payrolls. Yet even if they grow as much as economists expect—by 200,000—that ought not to put recession fears fully to rest.