One of the most watched forecasts has declared the risk for a recession is very real. Here are the details…
The UCLA Anderson Forecast announced Wednesday that the United States economy is at a “very real risk” of falling into a recession in the year 2020. “A year ago we were looking forward to a synchronized global expansion; today we are starting a synchronized slowdown,” wrote David Shulman, a senior economist at the forecast group.
Warnings of a recession began not long after the last recession (dubbed the Great Recession) was declared over. Many thought that the economy hadn’t actually recovered and that the problem was easy money policies of lenders and a much too low interest rate. But others have been touting the strength of the economy as an American feat of greatness for the past few years, without much evidence other than the stock market bubble to back it up. But now, one of the most watched forecasts has declared the risk for a recession is very real.
A forecast released Wednesday by economists at UCLA Anderson School of Management said: “The jolt from the very expansionary fiscal policies of the Trump administration will soon exhaust itself and there is a very real risk of a recession in late 2020.” The forecast has predicted that the GDP (Gross Domestic Product) will drop to 1.7% in 2019 and “a near-recession” level pace of 1.1 percent in 2020, according to a report by CNBC.
“The current expansion is getting long in the tooth,” writes UCLA economist Edward Leamer in his essay in the report. “We are in the 38th quarter of the expansion and only one of the previous ten expansions has lived so long, and it perished in the 40th quarter.”
“A year ago we were looking forward to a synchronized global expansion; today we are starting a synchronized slowdown,” wrote David Shulman, a senior economist at the UCLA Anderson Forecast. “The U.S. economy is part and parcel with the global slowdown, an eventuality we have been forecasting for over a year.”
Despite the grim 2020 outlook, the forecast sees the national economy staging “a modest rebound” during 2021. It anticipates the Fed will embark on an easing policy in 2020 and then by mid-2021 the pace of real U.S. economic growth is seen at “around 2 percent.” Even though that’s what caused the bubble to begin with.