Part 5/7:
- Elevated new home inventories signal overbuilding, crippling the housing market.
The document emphasizes that recessions typically occur when an economy becomes susceptible to downturns followed by sudden shocks. This kind of vulnerability combined with slower consumer spending could spell trouble ahead.
Financial Conditions and Economic Readiness
According to the Wall Street report, financial conditions have not yet tightened, which is generally viewed as a precursor to economic stagnation. Tightening conditions typically reflect decreased willingness from financial institutions to lend, severely impacting consumer spending and business investments.