In early 2008, copper prices were trading between $3 and $4 per pound, peaking at about $3.95 in late June of that year.
“I think that it is correctly moving with the economy, so we’ve seen a softening in terms of real GDP, and copper is reflecting that,” Campbell Harvey, a finance professor at Duke University's Fuqua School of Business, told the Washington Examiner.Ĭopper 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. Last week, the Atlanta Federal Reserve’s “GDPNow” tracker predicted GDP growth will decrease for a second straight quarter. GDP also declined by 1.6% in the first quarter of this year and appears to be in danger of contracting again during the second quarter. That is a steep and aggressive decline from its peak of $4.94 in March - a nearly 28% decline in just a matter of months. But when its price starts to fall, it could mean the economy is heading in the same direction.ĮIGHT RECESSION WARNINGS FROM IMPORTANT PEOPLE AND INSTITUTIONSĬopper is now trading at about $3.57 per pound. 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. Economists look at the price of copper as an indicator that the economy is at risk of recession, and it is flashing red.
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