For the duration of this economic expansion, consumer spending has been the dynamo driving growth in gross domestic product, or GDP. But now there are indications Americans are getting a little too dynamic. Their actions are out of whack. For the past two years, spending has risen faster than disposable personal income, as pointed out by Jason Furman, a senior fellow at the Peterson Institute for International Economics
The bond market’s yield curve is perilously close to predicting a recession — something it has done with surprising accuracy — and it’s become a big topic on Wall Street. Some economists on Wall Street think the economy could be growing at around a nearly 5 percent annualized clip this quarter. But if the current economic vigor is only reflecting a short-term stimulus coming from the Trump administration’s tax cut, then some kind of slowdown is to be expected.
There's mounting anecdotal evidence that President Donald Trump's trade war is causing trouble for the US economy and businesses. But Friday's report on third-quarter gross domestic product may be the best hard evidence yet that the tariffs are causing major disruptions in the economy.
For stock investors in the United States, the political and economic outlooks have suddenly become ominous. More volatility could be in store this week. “The fact is that politics is driving the economy to an extent that is
very atypical,” said Julian Emanuel, chief equity and derivatives
strategist at BTIG, an institutional brokerage firm. “We would say
probably to the greatest extent that we’ve seen in our investing
Cheaper mortgages are usually a boon to the housing market. But this
year, a sharp drop in mortgage rates hasn’t provided much of a lift, and
that could bode poorly for the Federal Reserve’s efforts to shore up
The Federal Reserve cut interest rates
for the first time in more than a decade on Wednesday as it attempted to
guard the record-long economic expansion against mounting global risks. The
widely expected quarter-point move, the Fed’s first since it cut rates
to near zero in 2008, is meant to protect the economy against the
potentially harmful effects of a growth slowdown in China and Europe and
uncertainty from President Trump’s trade war.
The American economy is slowing, dragged
down by trade tensions and weak growth overseas. But there are few signs
that the decade-long expansion is on the verge of stalling out.Gross domestic product, the broadest measure of goods and services produced in the economy, rose at a 2.1 percent annual rate in the second quarter, according to preliminary data released by the Commerce Department on Friday.
President Trump is ending a tumultuous summer with his approval rating
slipping back from a July high as Americans express widespread concern
about the trade war with China and a majority of voters now expect a
recession within the next year, according to a new Washington Post-ABC News poll.
The trade war between the U.S. and China worsened
Friday as Beijing imposed retaliatory tariffs on $75 billion in American
goods and President Trump took the extraordinary step of calling on
U.S. companies stop doing business with China. The
new tariffs, which included reinstated levies on auto products,
delivered a strategically timed blow as recession warning signs cast
doubt on the strength of the U.S. economy.
President Trump on Tuesday confirmed that he is considering whether to
push for a temporary payroll tax cut amid mounting concerns about an
economic slowdown. Trump’s comments pulled back the curtain on a freewheeling policy
process within the White House. Senior administration officials are both
trying to assess the real weaknesses in the economy while also
determining whether they should take any steps to intervene before the