The Trade war is fully active between the US and China, dipping GDP of various countries in between and an overall environment of sinking markets.
Compounding the problems, many factors are indicating of an early recession. During any recession, there is a noticeable decline in economic activities around the globe — lasts from a few months up to couple of years.
Global Recession hits earlier in 2019 itself
The Global recession is already in. As per reports, the Federal Reserve overreaction is the cause of the latest recession. The Global economy is towards the slowdown and markets are crashing. There is depression in the oil and auto industry, and these all are indicators of recession knocking the door.
1. Unemployment Rate On the Rise – There is an increase in the unemployment rate that too on a 50 year low. A rise in the unemployment rate is an early indicator of the recession on its way.
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2. Housing Sector Investment Declines – The Residential building market or the housing market is a definite determiner of economic performance. Right now, the Real estate industry is going through a lean phase.
3. The Yield Curve Indicates Recession – The yield curve depicts that the interest rates of the ten-year treasury bonds are falling rapidly, even below the three-month bonds. The yield curve trends right now show signs of earlier recession.
4. Consumer Engagement is Low – Consumer Engagement is on an all-time low. Without customers spending money on goods and services, economies cannot be thriving. Right now, the trends show that customers sentiment is negative, and they do not want to invest much money.
5. Trade War is the Major Culprit – The trade policy and increased protectionism can be the most significant factors of recession arriving in 2019. Most of the Economic Thinkers have straight away credited the early recession to US-China Trade war. The Federal reserves rates cuts are expected again in September.
The significant superpowers in the world are at loggerheads with each other that has brought the world economic growth to a considerable low. As President Trump announced a hike in tariffs, there may be higher risks of a longer-lasting recession.