ACT Research: Chances of a Mild Recession Increasing

According to ACT’s latest North American Commercial Vehicle Outlook, the potential for a mild recession is becoming increasingly likely.

“We find ourselves in a turbulent environment where still significant positive and increasingly negative economic forces are crashing into one another.” Kenny Vieth, president and senior analyst of ACT Research, said. “With inflationary shocks emanating from Ukraine, the Fed’s task of engineering a soft landing has become increasingly challenging. We believe downward pressures are building, and the probability of recession continues to grow. We think the probability of a mild recession is now nearly as likely as that of our base-case scenario.”

“With the current head of steam that includes healthy consumer and business balance sheets, strong employment demand and pent-up manufacturing sector activity, this inflation driven economic slowdown is on one hand somewhat unique. On the other, traditional recession predictors are in play: Fed rate hikes, high energy prices, negative exogenous events and falling equity valuations come to mind. We believe the odds of a recession materializing, in some form or fashion, are essentially 50/50 relative to our slowing topline growth into a modest freight recession base case.”

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