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Eric Basmajian points out that less than 20 percent of gross domestic product is responsible for all recessions in the U.S.
He highlights that residential investment, durable goods consumption, and business equipment investment are the main triggers. Currently, only residential investment is in contraction, with the other two components stable. Basmajian argues this is insufficient to break the economic cycle.
Basmajian has previously said that both the worst and best three-month periods for stocks typically occur during a recession, according to past analysis. He also noted that building permits serve as a leading indicator in the housing cycle, with construction activity following about one year later. These observations continue to inform his monitoring of recession triggers.