Is the ‘Great’ US Economy already slowing?

There’s plenty of good news — today’s jobs report showed unemployment holding at a stunning 49-year low, for instance. But look closer, and visible threats suggest an all-out recession could come as soon as next year.

Between the lines: Key economic indicators are flashing red.

• Worker productivity is sluggish. The third quarter marked the “32nd straight quarter of yearly growth below 2%, a long and consistent stretch of anemic growth that hasn’t happened before in the post-World War II era,” the WSJ reports.
• Manufacturing activity has stalled for the first time in two years, possibly the result of President Trump’s multi-front trade war.
• Business investment is laggardly. Rather than using their $1.2 trillion tax cut on capital spending, companies are on track for the biggest-ever year of stock buybacks, possibly reaching $1 trillion.

And U.S. economic growth is already slowing. In the third quarter, GDP growth retreated to a 3.5% annual rate, down from 4.2% the prior quarter. Going forward, economists expect growth to hit 2.9% in the fourth quarter, and 2.5% in the first quarter of 2019.

The forecasts for what comes next are all over the map — but recession is a common theme.

• Megan Greene, chief economist at Manulife Asset Management, expects a recession after 2021.
• Mark Yusko, founder of hedge fund Morgan Creek Capital, forecasts recession next year, and puts the odds at 100% — thanks to trade tensions.
• “The trade rhetoric is one of the dumbest things in the history of all administrations and it will cause a global recession,” Yusko told a recentinvestment conference.

Another concern is the Fed’s series of interest rate hikes, which are pushing up prices and, according to Greene, are a leading indicator of recession….

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Note…

It isn’t just America’s economy  that is slowing….