US economists see rising risk of economic recession

The risk of an economic recession in the United States has grown to the highest level in seven years, according to a survey by economists.

There is now a 25 percent chance of a recession within the next 12 months, the highest level since October 2011 and up from just 13 percent last year, a monthly poll of economists conducted by The Wall Street Journal found.

The growing risk of a recession came from a slew of worries including US trade tensions with China, rising interest rates and the sharp stock market selloff, the survey revealed.

The massive equity sell-off in December on Wall Street led to the US stock market’s worst year since the financial crisis in 2008.

The Journal surveyed 73 economists from January 4- 8.

The economic outlook for 2020 is even dimmer with 56 percent of the economists foreseeing a downturn.

About 84 percent of the economists predict a worsening US economy, which is about the same level in December but higher that only 53 percent in October.

The recent economic data has been mixed. While December’s employment report shows the labor market remains solid, the US manufacturing index hit a 15-month low in the same month.

A survey by Reuters in December indicates that the risk of a US recession in the next two years has risen to 40 percent.

Global slowdown

The world economy is showing clear signs of a downshift, with many US trading partners, especially in Europe and Asia, weakening or expected to expand at a slower speed. Their deflating growth can, in turn, weigh down the US economy.

Several other global risks abound. There is Britain’s turbulent exit from the European Union. Italy appears close to recession and is struggling to manage its debt.

China, the world’s second-largest economy after the US, is trying to manage a slowdown in growth that is being complicated by its trade war with Washington.