“If you’re looking for something to discuss at your barbecue while watching fireworks, be sure to mention this is now the oldest economic cycle in history at 121 months old,” explained LPL Senior Market Strategist Ryan Detrick. That’s right, this cycle just topped the previous record of 120 months from the 1990s technology boom.
Although 10 years might sound old, keep in mind that developed markets tend to have longer cycles of economic growth. “Is 10 years really that old for an expansion? Maybe not, as Australia hasn’t had a recession for nearly 28 years,” according to Detrick. “Not to mention Canada, the U.K., Spain, and Sweden, which all have had at least 15 years of growth starting in the early 1990s and ending in 2008. Going even further back we see that France, Germany, the Netherlands, Norway, South Korea, Ireland, and China have all had at least 15-year-plus expansions since World War II.”
Emerging countries tend to see more of a boom-and-bust type of cycle while more developed nations can have longer-lasting periods of growth. In fact, it’s plausible that the United States could have avoided a recession in 2001 if the 9/11 attacks had not happened, which would have produced a nearly 17-year expansion. So maybe 10 years isn’t so old?
As our LPL Chart of the Day, This Is Now The Longest Expansion Ever, shows, this is now the longest expansion ever. Additionally, over the decades as the United States turned into a developed nation, the cycles of growth tended to last longer. Thanks to the dual benefits of fiscal and monetary policy, we continue to expect this current cycle to have potentially years of growth left.
From all of us at LPL Research, we wish everyone a fun and safe July 4th holiday!
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Please see the Midyear Outlook 2019: FUNDAMENTAL: How to Focus on What Really Matters in the Markets for additional description and disclosure.
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