Why US Economy May Be Heading for Recession in 2020

US Economy Recession

The US economy may be heading for recession in 2020. After the choking slowdown that was experienced in 2016, the world economy picked up in 2017 and stabilized in 2018. In all these there is a caveat- Global economy is forever dynamic. It never holds in one spot and the largest economy, the United States determines its directional swing.

Despite looking strong to an outsider, the American economy is showing some ominous signs of slowdown. This is revealed by low unemployment rates, high rates of spending, and strong markets. This is revealed in forecasts for growth in 2019: 2.7 percent (Wells Fargo & IHS Markit), 2.3 percent (Morgan Stanley & Moody’s). They also generally expect the economy to get weaker and weaker as the new year progresses. It seems 2020 looks more like the year for a recession.

One of the key external reason is attributed to the trade dispute America is having China. Another one is the crash in oil price as being dictated by oversupply form alternative source such as shale.

Domestically, the Trump administration’s fiscal policy has not been conservative enough, leading to big budget deficit for the federal government. This outcome is not further helped by the personality of the president, who dedicates more time to self appeasement than otherwise.

How likely is a recession in US 2020

Summarily, the uncertainties in the following economic indicators, hold the ace to the stability of the American economy: slowdowns in the US or China, higher US inflation and subsequent control by the Fed, trade wars, a stronger dollar and falling oil and commodity prices.