Scott Colbert Claims of No Recession Until 2023

Scott Colbert, chief economist at Commerce Trust Company in St. Louis, disagrees with the prevailing consensus that the US economic cycle is on its last legs.

“We're here to tell you that we're going to avoid that recession, and we're going to make some more forward progress.” Colbert said in a presentation on the economic outlook for 2020.

While growth may have slowed, the economy is in much better shape than is believed by many, according to Colbert.

Speaking on the Contrarian Investor Podcast, he said that, "if we had to put a number on it...we would push it out towards as much as four more years" of economic expansion.

The US economy has seen 10 recessions since World War II and find itself in the middle of its 11th expansion since 1945. The magnitude of the current expansion is “about half, or maybe 60% of the average other expansions,” Colbert said. The reasons for this can be traced to “the three D’s”: debt, deficit, and demographics. None of these are good for the economy long term.

But there are several positives working as counterweights. Household net wealth has increased by 61% net since 2008. Debt payments as a percentage of disposable personal income have decreased. Most importantly, employment growth continues to be strong, as exemplified in the November nonfarm payrolls report. Over 20 million jobs have been created this economic cycle, and job growth continues at a 1.3% pace, Colbert said.

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