Economists look at the price of copper as an indicator that the economy is at risk of recession, and it is flashing red.
While not as commonly talked about as other economic metrics, such as the unemployment rate or yield curves, copper has proven over centuries to be a procyclical commodity, which means that when its price goes up, so typically goes the economy. But when its price starts to fall, it could mean the economy is heading in the same direction.Copper is now trading at about $3.57 per pound. That is a steep and aggressive decline from its peak of $4.
Copper has been a strong indicator of recessions in the past and is so well regarded that some refer to it as “Doctor Copper,” a tongue-in-cheek suggestion that the metal has a doctorate in economics. The reason copper is such a good indicator is that it is used in just about everything that consumers buy, from household appliances to automobiles. It is also used in the construction of new homes and commercial buildings.
Harvey said that of all the commodities, copper is the one that most closely tracks what is happening in the overall economy. He said other commodities, such as oil, aren’t as good of indicators because of the complexity of supply problems, embargoes, and other exogenous factors. Copper prices have historically been tied to major events and economic shifts. For instance, in the late 18th and early 19th centuries, ships, which were the only way to carry goods from Europe to the Americas, began to be built with copper bottoms. After the Royal Navy decided to re-hull its fleet, copper prices exploded, more than doubling from 1785 to 1807.
Many economists say a recession is very likely this year. The National Bureau of Economic Research, a private academic group, defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.”
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Copper price retreats as China’s covid woes dampen demand prospectsBenchmark London copper retreated on Friday and was on track for a fifth straight weekly loss on worries that fresh covid-19 restrictions could slow the pace of infrastructure projects. miningnews copper
Read more »
I Got A Copper IUD, And If You Are Seeking Long-Term Contraception, I Highly RecommendThis is my review of the copper IUD, including pros, cons (there aren’t many), side effects, and how it can be used for emergency contraception.
Read more »
Santa Paula man allegedly found cutting copper wiring from SoCal Edison utility polesA resident spotted three people cutting power lines along South Mountain Road near Balcom Canyon Road in an unincorporated area of Ventura County near Fillmore.
Read more »
U.S. private sector jobs have returned to prepandemic levelsPrivate sector jobs in the U.S. have returned to levels not seen since before the Covid-19 pandemic, according to the Bureau of Labor Statistics.
Read more »
June jobs report likely to reduce recessions risk: Economic expert'Mornings with Maria' breaks down June's better-than-expected jobs report adding 372K jobs to the labor market while unemployment remains at 3.6%.
Read more »
Washington could force America into recession if they do the 'wrong things,' billionaire CEO warnsBillionaire CEO John Catsimatidis said over the next 90 days inflation could be reduced if Washington gets a grip on oil costs and stabilize food prices
Read more »