08 Aug Past due for Trouble? Click to keep reading…
The U.S. is about to set an economic record. In July, the U.S. will have enjoyed a 10-year economic expansion. Is the expansion set to continue indefinitely, or is an upset inevitable?
The Kiplinger Letter thinks that there are signs that the economy is slowing down, but that a recession is not imminent. It’s expected that GDP will grow about 2% this year, but may drop to somewhere between 1 and 2% in 2020. Industrial output has been hampered by the trade war and a decrease in capital spending. Export firms are fighting a challenging overseas market that includes a European recession (Italy), and a slowdown in Asia. The outcome of the U.S.-China trade talks will impact both sides of the Pacific. If President Trump makes good on his threat to apply a 10% tariff on $300 billion of Chinese goods on September 1, the cost to U.S. consumers and businesses could offset the savings earned from the 2017 tax cut. Other concerns include the looming argument over the funding of federal agencies, raising the debt ceiling, and unrest in the Persian Gulf.
Counterbalancing these red flags: unemployment is at an historic low, business confidence is solid, and inflation remains low. These signs all point to continued economic well-being.
The net/net – while the economy is still growing slowly, be on the lookout for additional red flags that could signal a downturn.–The Kiplinger Letter (2019 June 14). Vol. 96, No. 24.