Major recession drawdowns focused on housing and durable goods, Eric Basmajian notes

Major recession drawdowns focused on housing and durable goods, Eric Basmajian notes
Recessions driven by housing and goods drops

Eric Basmajian states that since 1970, with the exception of the pandemic period, the most significant cyclical drawdowns during nearly every recession in the U.S. have been concentrated in residential investment, durable goods consumption, or both.

He adds that the primary exception to this trend was in 2001, when business equipment investment, particularly in computers, experienced the largest decline.

Basmajian has previously noted that U.S. total debt-to-GDP has held near 360% for a decade, with a shift toward government debt and away from private debt here. He has also examined whether the period of negative real interest rates after 2008 could represent a lasting change for the U.S. economy here. These observations provide context for his views on recessionary drawdowns.

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