We increasingly hear sounds about a possible global recession. Take top economist Steve Hank who ran the alarm bells a while ago. But the economic signals are anything but unambiguous. While some indicators indicate a delay, there are also bright spots that offer hope.
Global economy is divided
An important indicator of a global recession is the economy of the richest country in the world, America. And based on hard figures we see a battle. On the one hand, employment appears to be resilient, according to the latest data from the Bureau of Labor Statistics (BLS). For example, 177,000 jobs were added in April.
On the other hand, consumer confidence remains exceptionally low. In April it dropped to the lowest level in almost five years, which is a worrying development. If consumers remain reluctant to spends, this can have major consequences for the economy, since consumer spending makes up more than two -thirds of US economic activity.
Stock market lives up again
When the trade war under American President Donald Trump reached its peak at the beginning of April – when the whole world was imposed import duties – the stock markets suffered considerable blows.
Especially tech companies, which are highly dependent on Chinese chips, had a hard time when the American import rates rose to no less than 145%. Despite the imminent recession risks, the stock markets have now been struck again. For example, the Dow Jones rose by 9.3%, the Nasdaq by 16.5% and our own AEX even with 13% in just one month.
What the experts say
We do not immediately become wiser of the data. Then the question, what do the experts say? On the one hand you have Guy Miller from Zurich Insurance Group, who warns of a significant increase in recession risks, despite some trading deals. He estimates the chance of a recession in the US at 50-50, a clear indication that he is seriously concerned about the current economic situation.
On the other hand, Economist Henry Cook from MUFG is more optimistic. He expects that a mild recession can come in our own euro zone and that it will only be short -lived. According to Cook, a recovery in consumer spending and lower interest rates may possibly afraid a deeper economic decline.
All in all, there is no clear answer among the experts. In the coming period, it will continue to wait and see how the situation is developing worldwide.
Source: https://newsbit.nl/komt-er-een-recessie-experts-zijn-er-nog-niet-over-uit/
