Economists warn the risk of recession is rising because of Trump's trade war
Engines assembled as they make their way through the assembly line at the General Motors manufacturing plant in Spring Hill, Tennessee, August 22, 2019.The risk of a recession is rising, and the main threat to the economy the Trump administration's ongoing trade war, according to a survey of a panel of business economists.
The risk of a recession is rising, and the main threat to the economy is the Trump administration's ongoing trade war, according to a panel of economists surveyed by the National Association for Business Economics released Monday. The results of the survey, conducted the week of Sept. 9-16, come as many analysts see warning signs in the latest U.S. economic indicators, including a plunge in manufacturing activity to more than a 10-year low in September and a sharp slowdown in services industry growth to levels last seen in 2016. Those reports last week heightened fears the economy may be flirting with a recession, sending stock prices sharply lower.
Rising pessimism about corporate profits and a wider economic slowdown have rattled the stock market. Last week, Wall Street's main indexes suffered big one-day drops after employment and manufacturing data suggested that the U.S.-China trade war is taking an increasing toll on the U.S. economy. Adding to those trade concerns, the Trump administration won approval Wednesday to slap import tariffs on $7.
Despite the economic damage inflicted by the Trump administration's trade war, the NABE panelists don't believe the policy is succeeding in its goal of reducing the U.S. trade deficit. Instead, they see the trade gap widening significantly—from $920 billion in 2018 to $981 billion in 2019, and then to $1,022 billion in 2020.
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