A change in 1 of 3 factors could save the U.S. economy from entering a recession.
James Swanson, chief investment strategist at MFS Investment Management, Boston, a unit of Sun Life Financial Inc., Toronto, gave that assessment during a recent economic forecast teleconference.
The 3 factors that could move the economy into recession are the price of oil, the decline in the housing market, and the current credit crunch, Swanson said.
The factor most likely to move in a helpful direction might be the price of oil, Swanson said.
The idea of the price of oil falling is plausible, because the market seems to be assuming that oil should sell for $80 per barrel, rather than $133 per barrel, Swanson said.
If, however, the price of oil stays high, the housing market remains weak, and the credit crunch continues, the U.S. economy will move into a recession, Swanson predicted.