Is the U.S. headed for a recession?

One of the things that have gotten so many people worried, especially in the business world, is the possibility of the fact that the United States might soon experience what is known as the economic downturn. While there might be strong indications that this will happen, the current reality of things does not support this prediction. Donald Trump has, on several occasions, maintained that the US economy is strong and that people should disregard anything that is coming from soothsayers.

These predictions are coming because people are becoming worried about the recent trade war between the United States and some powerful countries of the world like China. Also, the investment and the industrial sectors of the United States of America are not looking so healthy. If these two sectors are further hit with low economic growth, then the US should be ready for recession. It is highly important to know that the recession is in view, when the GDP of a country gives two negative economic growths for two consecutive quarters.

Some financial analysts have predicted the Unites States is headed for a recession sometime in 2018 or 2019. The steady increase in interest rates by the Federal Reserve will put too much pressure on the US economy and cause consumers and businesses to cut back on purchases and banks to cut back on loans. The rising interest rates also tend to flatten what’s known at the Treasury yield curve. This curve has been a reliable predictor of recession.

Other reasons cited by economists include the unemployment rate and a slowing of hours worked. The current rate of 3.5% is consistent with gaps seen in previous recessions. Another leading recession predictor, The Conference Board Leading Economic Index also indicates the US is heading for a recession.