Oct 7, 2019

Economists forecast slowing U.S. growth from U.S.-China trade war

Shipping containers from China in Long Beach, California. Photo: Mark Ralston/AFP/Getty Images

Economists said in a new survey that they think the U.S.-China trade war will bring about a slowdown in U.S. growth this year and next, per AP.

Why it matters: The economists also said they expect the trade war to increase the risk of recession in late 2020, which would put an end to the longest period of economic expansion on record in the U.S.

By the numbers: The survey by 51 forecasters with the National Association for Business Economics shows they expect U.S. GDP to slow to 2.3% this year from 2.9% in 2018.

  • The forecasters estimate a 7% likelihood of a recession starting this year, a 24% likelihood by mid-2020 and 47% by the end of 2020. They foresee a 69% chance of a recession beginning by the middle of 2021.
  • That timing would be fortuitous for President Trump, as most people wouldn't be feeling the effects when they vote on Nov. 3, 2020.
  • To avoid a recession, the panel of economists presumed that the Federal Reserve will continue to cut its benchmark interest rate, which the central bank has so far done twice this year.

What they're saying: "The rise in protectionism, pervasive trade policy uncertainty and slower global growth are considered key downside risks,” said Gregory Daco, chief U.S. economist at Oxford Economics.

Go deeper: Business leaders spooked by Trump's manufacturing slump

Go deeper

Trump's trade war has reversed the world's growth story in 2 years

Illustration: Sarah Grillo/Axios

In January 2018, coming off of a year in which global growth rose to near 4%, then-IMF managing director Christine Lagarde said the global economy was experiencing "the broadest synchronized global growth upsurge since 2010" and that "all signs point to a continuous strengthening."

The latest: On Tuesday, the IMF said it expects global growth to slow to the weakest pace since the 2008 global financial crisis, noting the decline would be a significant drop from its 2017-18 levels.

Go deeperArrowOct 15, 2019

U.S. economy grows 1.9% in the third quarter

Data: Bureau of Economic Analysis; Chart: Axios Visuals

The U.S. economy grew at a 1.9% annualized pace in the third quarter, the Commerce Department said on Wednesday — higher than the 1.6% economists expected.

Why it matters: The economy is still growing at a moderate clip, though the number marks a significant slowdown in growth from just the beginning of this year — when GDP jumped 3.1% — as the boost from President Trump's tax cuts fades and the U.S.-China trade war weighs on growth.

Go deeperArrowOct 30, 2019

IMF predicts slowest global economic growth since 2008 financial crisis

Gita Gopinath, the IMF's chief economist, and Gian Maria Milesi-Ferretti, the IMF's research deputy director, take questions from the media. Photo: Olivier Douilery/AFP/Getty Images

The International Monetary Fund is now predicting global economic growth will slow to its weakest level since the 2008 financial crisis in its third revision of its 2019 forecast.

The big picture: A sharper-than-expected slowdown in international trade has affected manufacturing and investments, according to the organization's World Economic Outlook.

Go deeperArrowOct 15, 2019