The White House's top economic advisor, Larry Kudlow, believes that the US economy has a very realistic chance of topping 3% in 2020. This would be a very significant achievement, as we saw slower than normal growth in 2019 that caused many to believe a recession was looming. However, after a strong Q4 in 2019, partly due to holiday sales, the stage has been set for a promising 2020 economy. A major contributor in that assumption would be the manufacturing industry, which has seen an unexpected rise in output numbers early in 2020.
Do you see his as a sign of the threat of a nearby recession disappearing?
8 comments:
I do believe that this statement along with the supporting evidence of future growth will have a positive impact on the U.S Economy, however I don't believe the threat of a nearby recession can disappear. With any given moment in time where the economy is working towards positive growth, the threat of a recession is always present since there are strong external factors which could trigger a recession at any point, such as a geopolitical crisis, trade policies.
I am curious how this will effect the election season this year. Should industry and the middle class feel the economy growing and positively impacting their livelihood, it could lead to a growing support for the current election as well. I believe this growth could also have an impact on how President Trump's current time as President is viewed, should he leave office under an economy on the comeback.
I do not believe this expels the threat of a near recession. Policies and other external factors have a big effect on business confidence which can potentially decrease investment and changes in investment have the largest impact on GDP, which could add more fuel to the fire of an incoming recession.
I believe that an upcoming recession is still going to occur. Just because there is one quarter with higher output numbers, doesn't mean we are clear of a recession. I think with inflation growing faster than GDP, there is still a possibility of a recession soon. Will economic cycles, there has to be a point in the economy where we are struggling, even when it is very promising after one quarter. The yield curve was inverted earlier this year, so even if it changes, the recession will still happen eventually.
I believe that nearby recession has been halted for time being but then there also some external factors which could trigger an economic slowdown, such as, tariffs imposed on european goods had retaliatory impact from Europeans partners who then have imposed tariffs too on american goods. This increases cost of production for producers hence possibility of cutting back on employees. If this trend continues, US might find itself in hot waters.
I think a recession will still be occurring in the next few quarters and I don't think this can serve as the main factor of whether a recession will be occurring in the near future or not. A recession occurs after two consecutive quarters of negative growth. It has been over 10 years since the last recession occurred. With the virus outbreak going on in China and Brexit occurring at the end of this month, I think there will be a recession, but not as bad as the 2008 Great Recession. It will be interesting to see how these things will have an effect on the economy.
I don't necessarily disagree with the main claim of the article; it would be natural to project higher growth after a strong season of sales. However, our economy is due for another recession. Some might even say we are overdue. Financially, the United States is in a similar position to the roaring '20s of 100 years ago, and at the end of that decade we had the worst crash in US history. With continued overvaluation is the stock market, specifically in unproven tech companies, we might be repeating history by 2029.
I would certainly not argue that a recession is forthcoming, as any period of economic growth, and especially one of this amount of time and magnitude, must be succeeded by at the least a small recession. However, the article leads me to believe that it may not be coming as soon as we think.
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