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Analyst: About a 25% Chance of a 2020 Recession

The U.S. economy grew at a 2.2 percent rate in the fourth quarter last year, revised down today from the 2.6 percent clip previously reported.

This story by Reagan Haynes originally appeared in Trade Only Today.

The actual pace of expansion represents an even more dramatic slowdown from the 3.4 percent growth rate of the third quarter.

The new figures also show how quickly the stimulus faded from President Donald Trump’s $1.5 trillion of tax cuts, which had juiced growth to as high as 4.2 percent in the second quarter, according to The Street

Half of the American public thinks the economy is in good or excellent shape, according to CNBC – a decline from 58% in the third quarter, but still encouraging, said Chad Moutray, chief economist with the National Association of Manufacturers.

“I think the risk of recession this year is about 20 to 25 percent,” Moutray told Trade Only Today. “I don’t think it’s imminent.”

Moutray doesn’t see the Federal Reserve raising rates again until the end of 2020 and expects the housing market to stabilize. 

“We’re getting somewhat mixed messages from the markets right now,” said Moutray. “We have really strong job growth, optimism is high when I talk to firms about their overall outlook, but they also have this lingering worry about the global economy, and looking at Germany and China, we’re already seeing materially slower growth than even a couple of months ago.”

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