US | Is the country on the brink of a recession?

Summary

There are several warning signs that the U.S. economy is beginning to lose steam. The labor market shows some weakness, with job creation having slowed significantly.

Key points

• Key points:
• In the year through August, an average of 75,000 jobs per month had been generated, substantially less than the 143,000 monthly average of the same period last year.
• The main reason why this has not led to an increase in the unemployment rate is that the supply of labor has also fallen, largely due to the immigration policies being pursued by the Trump Administration, which have resulted in fewer arrivals of migrants and a greater number of deportations.
• Despite lower job creation, consumption remains resilient. However, the traditional components of investment are showing significant weakness.
• If Artificial Intelligence (AI) fails to produce a meaningful economic transformation, the outlook for the U.S. economy going forward may not be as bright.
• High fiscal deficits will push up public debt and exert upward pressure on long-term interest rates, which will affect investment.

Geographies

Topics

Tags