- Registration time
- Last login
- Online time
- 71 Hour
- Reading permission
Robert J. Shapiro is co-founder and chairman of Sonecon, LLC, a private firm that advises US and foreign businesses, governments and non-profit organizations. From 1998 to 2001, he served as Under Secretary at the US Department of Commerce from 1998 to 2001. He was the vice president of the Progressive Policy Institute, an organization he co-founded in 1989.|
The following are excerpts from his January 3, 2019 article headlined "The Deteriorating US Economy" with the subheading "Economists cannot say with precision when the next U.S. recession will begin. But there is no reasonable doubt that the U.S. economy will weaken in 2019."
In all likelihood, President Trump will face a seriously weakening U.S. economy in 2019, a development that could well shake his hold on Congressional Republicans and even some of his ardent supporters.
To date, the longest expansion in U.S. history lasted ten years (from March 1991 to March 2001). The current economic expansion will match that milestone in mid-2019....
Given that we have an elderly expansion on our hands, an economic downturn in the foreseeable future is thus a matter of when, not if.
At this point in the U.S. business cycle, one should see consumers continuing to pull back on purchases of new homes and large items (“durables”). That would be the case in 2019 even if the incomes of average households had not lagged inflation over the last 20 months. But they have.
As consumer demand continues to cool, businesses will slow new investment and hiring, and overall growth will likely fall to or below 2%. At the end of that road lies the next recession in late 2019 or early 2020. That’s not exactly supportive of Trump’s aspirations for reelection to the Oval Office in November of next year....
The deteriorating outlook on the U.S. economy has not been lost on global investors. The best evidence that their confidence in the U.S. economy has waned is not so much the stock market’s recent stumbles, but rather the changes in what economists call the “yield curve.”...
Those changes in the yield curve are the most reliable measure economists have that a recession is coming. According to the Federal Reserve Bank of San Francisco, an inverted yield curve has preceded by about one year every U.S. recession since 1960 with only one false positive (in 1966).
The bad news for President Trump as he contemplates the seemingly certain toxic fallout from investigators in 2019 is that the yield curve has already flattened dramatically....
Based on history and the hard data on what’s happening today, there is no reasonable doubt that the U.S. economy will weaken in 2019 as it enters the final stage of this business cycle. (End excerpts)