Sunday, February 3, 2019
United States Economy
Despite the uncertainty of the economy at the end of 2018, with the markets dropping and consumer
confidence taking a hit it does not seem as we are heading into a recession. Around the world we
have seen a decline in growth. For example China equity market had a tough 2018, as well as continuous decline in growth over the past couple of years. Its not just china, throughout Europe the macroeconomic indicators have weaken which is a sign of a slower economy. With a slowing global economy it will most likely have an effect on our own economy. While slower growth might be on the table our macroeconomic indicators still look okay and an immediate recession does not seem to be on the table.
Article : https://www.cnbc.com/2019/01/31/michelle-meyer-on-economy-risks-are-higher-including-china.html
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4 comments:
I think it's very interesting that even though growth is slowing, the U.S. economy is doing well enough to avoid a full-blown recession at this time; it makes me wonder how much cushion the the economy actually has. I also wonder if the delay in macroeconomic indicator data is significantly influencing this report's statements in any way.
U.S. quarterly growth fell from 4.2% in Q218 to 3.4% in Q318, this is certainly not a grand indicator that the U.S. economy is approaching apocalyptic times. It certainly seems reasonable that growth may slow, especially as the slow in the yield spread tends to lose velocity. With regards to the economy's cushion, Jay Powell certainly gave the pillows a good fluff with his recent announcement that he does not expect to cut rates and the end of QT will be sooner rather than later. I'd agree that the delay on data, especially GDP data, is especially likely to lead to this report being influenced by such a delay.
As economies across the world are slowing down, I am interested to see if and how a correction in one market will ripple over and impact others. However, with slow growth and a large savings glut across the world, I wonder if large markets such as China and the United States will be able to take a correction in stride or feel less of an impact if the other one experiences one first.
To tag along with what Jack stated, how might a US recession affect the global economy? So many countries are dependent on the US, and vice versa. The world is so interconnected now with the advancement of technology, and many countries are heavily involved and invested with one another. If there is a recession in the US, for example, do you think this will lead to a global recession? In 2008, many countries in the EU were invested in real estate in the US and they really took a hit too when the market crashed. Could we see something like this again?
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