Economists see increased likelihood of US entering recession due to trade-related uncertainties: report

0 Comment(s)Print E-mail Xinhua, August 9, 2019
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Buildings of Midtown Manhattan are seen from the United Nations headquarters in New York, April 23, 2019. [Photo/Xinhua]

The likelihood of the United States entering an economic recession in the next 12 months has increased to 35 percent in an August survey with economists, compared with 31 percent previously, Bloomberg News reported Thursday.

According to the survey that Bloomberg conducted on Aug. 2-7, economists polled also dropped their estimates for the U.S. economic expansion this year. On average, they predicted a 2.3 percent growth in gross domestic product (GDP) for the year, compared with the July forecast of 2.5 percent.

They also expect the GDP growth to slow to 1.8 percent in the third quarter, from 3.1 percent in the first three months of the year and 2.1 percent in the April-June period.

Regarding the global growth for this year, economists cut their forecasts from 3.3 percent to 3.2 percent.

The survey results came after President Donald Trump announced last week that an additional 10 percent tariff will be imposed on some 300 billion U.S. dollars worth of Chinese imports.

Meanwhile, the Bloomberg Consumer Comfort Index decreased 1.8 points to 62.9 in the week ending Aug. 4, Bloomberg reported citing data released Thursday. The latest reading, it added, is the weakest in almost two months.

In addition, the survey also showed that economists expected the next rate cut by the Federal Reserve to happen in September, as opposed to the previous projection of December. The economists saw a 25 basis point cut to the rate at the Sept. 17-18 Fed policy meeting that would bring the target range to 1.75 percent to 2 percent as being most likely.

In both the survey and the comfort index reports, Bloomberg cited trade tensions leading to economic uncertainties as the main reason for the downward outlook.

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