Jim Davis is editor of Scotsman Guide Residential Edition.
Reach him at (800) 297-6061 or email@example.com.
Amy Crews Cutts
Chief economist, Equifax
By Jim Davis
Amy Crews Cutts is senior vice
president and chief economist for
Equifax. A recognized industry
expert, Cutts brings to her role more
than 25 years of economic-analysis
and policy-development experience.
At Equifax, she is responsible for
analytics and research relating to the
consumer wallet — assets, income,
credit and spending along with
macroeconomic factors affecting
consumers. She also is responsible
for macroeconomic forecasting and
the economic analysis of employment and wage trends, home equity
and real property, and small-business
Recession naysayer explains what to really worry about
A number of economists, including former Federal Reserve Chair Ben Bernanke, believe the next U.S. recession
could unfold by 2020. Maybe or maybe not, says Amy Crews Cutts, Equifax’s chief economist.
She’s consistently downplayed the idea that a recession is near, even penning an article this past summer titled,
“Recession Concerns Revisited: Sky Still Not Falling.”
“Do I think we have solved the business cycle as an economic problem?” Cutts asks. “No, I think we will have a
recession again. I just don’t know when.”
The U.S. economy is currently enjoying the second-longest expansion on record, growing steadily since June
2009. (The longest expansion occurred between 1991 and 2001.) Some economists believe that the nation is
due for a recession. Cutts falls into the camp of economic experts who believe expansions don’t die of old age.
She points to Australia, which has set a global record with an economic expansion that has been underway for
a quarter of a century.
Cutts spoke with Scotsman Guide about her reasoning on recession risk and about what she does believe could
You’ve written in the past that the recovery will continue for some time. Do you still feel that way?
I don’t think it’s more likely or less likely than I did a year ago. The context of that is I think the next recession
will be caused by an exogenous [external] shock. There will be a dramatic change that will cause this recession
to happen as opposed to accidentally stumbling into it. There are any number of stresses that could cause that,
but I don’t think that probability has changed.
What kind of stresses?
One example is we do not know today the outcome of the Brexit negotiations, whether it will be a hard exit or a
soft exit and what will be the implications for global trade.
We clearly have today some trouble in emerging-market currencies. Argentina is the new kid on the block today
with regard to their stresses. Venezuela, of course, has been struggling for a while. … The third big example is
the United States’ trade policy — that we could, through our negotiations with China and elsewhere, end up in
Many recessions are associated with a defining issue, a tech bubble or a housing crisis. What could be the
concern for the next one?
If I were to rank them in order of the known risks, the biggest piece today is the potential for a trade skirmish to
erupt into an all-out trade war.
The unknown ones are completely random, a war, a financial crisis. You look back to , when Russia
defaulted on its bonds, that’s an example of a we-didn’t-see-that-coming shock.
Housing prices have cooled nationally recently, a trend sparked by flat existing-home sales and rising
interest rates. What do you make of that?
Prices haven’t cooled. Sales have cooled. CoreLogic Index is the one I follow the most closely, because I think
their methodology is the most robust. Looking at that, prices have held up well.
Normally at this point in a recovery, we would have seen homebuilding recovering to lead strongly in the
economy as both a jobs driver and an economic driver.
The housing market from a building perspective has not fully recovered. This is for a variety of reasons, importantly
a lack of labor to build and the margins are not in it for smaller homes. So, the builders are building more high-end
homes, putting additional pressures on the existing stock of what we’ll call average homes or affordable homes.
What are signs of optimism moving forward?
I think the American consumer is more prudent with their finances today than prior to the Great Recession.
That lesson has been learned, particularly among young consumers. They are more conscious of those risks.
What about the federal government? It seems to be borrowing a lot of money.
That is a concern. What’s concerning is it’s all fine and good to say the federal government is borrowing large sums,
[but] the question is who is buying those large sums [of U.S. Treasury debt], and will they be willing to continue to
do so if the trade war escalates. That money can’t come all domestically. … We need to look to China and other
large markets to buy our debt. One piece of collateral damage could be our ability to borrow at low costs. n