U.S. Economic Recession In 2019? “Forget About It,” Says Analyst
Little Rock, Arkansas – Consumer confidence is once again rising after the lengthy government shutdown, according to a new study by the University of Michigan.
Their most recent consumer sentiment index rose to 95.5 in February from 91.2 in January, preliminary data showed. This increase over-performed economist’s expectations.
According to the study, more respondents suggested that it was a good time to buy a major household item, vehicle, or a house.
Adding to the rebound in consumer sentiment is the remarkably strong job growth numbers in January when the U.S. economy created 304,000. This was up from a revised estimate of 222,000 from the Bureau of Labor Statistics.
Mark Zandi, chief economist at Moody’s Analytics said the dire China trade war warnings and 35-day government shutdown had very little effect on the U.S. economy’s ability to create jobs. “At least through the prism of the job market, it does not appear to have had a significant effect,” said Mark Zandi, chief economist at Moody’s Analytics.
Chris Rupkey, chief economist at MUFG Union Bank, told Politico that those warning of a possible recession don’t know what they are talking about. “Who is calling for a recession this year again? Whoever it is, you can forget about it after a picture-perfect jobs report to start the year off right,” Rupkey said.
However, the March 1, 2019, trade negotiation deadline with China is still looming over the global and U.S. economic picture. The U.S. is set to raise tariffs from 10% to 25% on $200 billion worth of Chinese goods on that day unless an agreement can be reached.
Negotiators from both countries continue to meet ahead of the deadline. President Trump has and continues to express optimism about the two sides reaching a deal.
Trade negotiators have just returned from China where the meetings on Trade were very productive. Now at meetings with me at Mar-a-Lago giving the details. In the meantime, Billions of Dollars are being paid to the United States by China in the form of Trade Tariffs!
— Donald J. Trump (@realDonaldTrump) February 17, 2019
Last month China released its GDP numbers for 2018 showing the slowest annual growth rate in nearly three decades, at 6.6%. The news was even worse for global investors as economists recently polled by Rueters expected a GDP growth rate of at least 6.8%.
The Trump tariffs are having a big impact on China, according to Dan North, chief economist at Euler Hermes North America. “We have tariffs on half of all the imports into the U.S. It’s absolutely putting a slowdown on China.”
President Trump has long believed the best way to get China to negotiate a new trade pact is to create leverage and incentives through tariff policy. The outcome of the trade negotiations could be a harbinger of the global economic landscape for months and years to come.