In a recent survey, most business economists believe the U.S. will fall into recession by 2021.
Days after the market euphoria over a ceasefire in the ongoing trade war between China and the U.S., a new study has suggested that things might not really be so rosy for the U.S. economy moving forward.
In fact, half of the business economists who were questioned believe that the U.S. economy will officially fall into a recession by 2020. This figure goes up to around 75 percent in relation to the possibilities of a recession by 2021. Nearly 300 members of the National Association for Business Economics (NABE) participated in the survey and only 11 percent of those questioned believe the U.S. will avoid a recession in the next two years.
With the current head honcho always very quick to blow his own horn when it comes to exactly how well the U.S. economy is doing under his watch, it’s likely that this news will not be something that gets a retweet.
The United States is currently experiencing an economic expansion of pretty epic proportions. Since the end of the financial crisis in 2009, the country has been on a consistent upturn and if growth was to continue until June of this year, it would mark the nation’s longest ever period of expansion.
The economy certainly looks strong from the outside, with low unemployment rates, high rates of spending, and strong markets, but a few cracks have started to appear in recent months. This has been most clearly evidenced in wild volatility in the securities markets and the worrying trend of falling consumer confidence in the overall state of things. The much-publicized trade war with China has also taken a toll which can’t be fully appreciated yet.
By now everybody understands that President’s Trump time in office is going to be characterized by his attacks on individuals, groups, and whole countries on Twitter. Usually, the targets of Trump’s attacks are the Democrats or other assorted enemies, but he also has a habit of sometimes feuding with people on his own team too.
Trump appointed Federal Reserve Chair Jerome Powell but this hasn’t stopped him from publicly attacking the policies of the Fed since Powell took charge.
Under Powell, the Fed raised interest rates four times in 2018, something which incurred the wrath of Trump. But these moves to fight off recession by Powell and the Fed have met with support by the economists questioned by NABE.
NABE President Kevin Swift had this to say on the matter:
Business economists continue to approve of current monetary policy. Nearly three-quarters of panelists believe that the Federal Reserve’s policy is ‘about right.’
Over 90 percent of the economists questioned by NABE said that the ongoing U.S.-China trade war was a cause of concern for them. Yesterday’s positive news on this could go some way to fighting off the recession that so many of them seem to believe is inevitable and could be yet another example of Trump confounding his critics.
If the trade talks with China continue to progress positively, it is expected the Trump and Chinese President Xi Jinping will meet at his Florida estate late next month to finalize terms. This would undoubtedly be heralded as another big win for the president and he might just prove the doubters and the economists wrong.
Recession, what recession? It’s not like Trump hasn’t proved people wrong before. Who’s to say 300 economists know any better.
Last modified: July 2, 2020 8:16 PM UTC