Former JPMorgan Chase chief economist sees no sign of a US recession

Former JPMorgan Chase chief economist Anthony Chan told FOX Business’ Charles Payne he is very optimistic about the state of the U.S. economy.

“We have very tight labor markets. We’re going to get an employment report on Friday, I think it is going to be very good. I think we’re probably going to get a number, you know, 175,000 gains for non-farm payrolls. So, I really see good stuff,” he said on Tuesday.

Payne pointed out that the news media have been stoking recession fears because they are “always more interested in disasters than positive stories,” but that more recently the focus has been on “possible disasters” and has completely ignored any good news.

While Payne acknowledges the last couple of weeks have seen several misses on key economic data, he said there’s also a lot of positive data out there that have been better than Wall Street consensus.

For example, Payne notes that May’s auto sales for 2019 saw the first monthly gain of the year despite predictions last month that the industry would fall off a cliff. He said that numbers show that Toyota is up 3.2 percent and Fiat is up over 2 percent.

While the 3-month to 10-year treasury yield and 10-year to the federal funds rate have inverted slightly, Chan said he doesn’t see any signs of a recession in the near future, despite investors’ fears.

“I’ve actually done research that actually forecasts when you get recession…there is a whole bunch of different versions but I look at the 10 to 2 year and I look at the index of leading economic indicators”, he said.

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He believes that the treasury yield and index of leading economic indicators have a 100 percent track record when it comes to signaling a recession and, right now, there are no signs of recession in the near future.

“Right now that 10 to 2 year is not inverted, the index of leading economic indicators has not dropped three consecutive months, and that usually tells us 11 months into the future to get a recession. I’m not getting those signals. So, I’m feeling good about the economy over next 11 months,” Chan said.