September 15, 2019 | by Staff

Is the Global Economy Facing Recession?

According to a September 2019, ABC/Washington Post poll, six in 10 Americans believe it is likely that a recession will hit in the next 12 months. An August 2019 survey conducted by the National Association for Business Economics found experts agree: three in four economists think the world economy will face a downturn by 2021.

Uncertainty about future growth was very much on the minds of attendees at MSCI’s annual Economic Summit, held Sept. 4-5 in Schaumburg, Ill.

And our experts had their own opinions about where markets, and the metals industry are headed.

Bernard Baumohl, chief global economist at the Economic Outlook Group, said economic fundamentals remain positive. The U.S. unemployment rate, at 3.7 percent, is at its lowest in nearly 50 years; wages and consumer spending are edging higher; inflation remains dormant; and borrowing costs are low. Baumohl also explained technology continues to drive growth by transforming the fabric of our economy and society.

Bill Strauss, senior economist and economic advisor at the Federal Reserve Bank of Chicago, seemed to agree, noting overall economic growth is predicted to rise above trend this year. Strauss explained how the probability of a recession over the next quarter has eased, and said it remains low for the next two quarters.

Baumohl – who was named by The Wall Street Journal as one of the most accurate economists – said there are some worrisome signs, however, including geopolitical threats in Iran, Hong Kong and North Korea, which are flashing “red” and have impacted business spending. Strauss discussed declining manufacturing output and capacity utilization.

Regarding worries about trade policy’s influence on economic growth, Strauss noted U.S. penalties on imports from other countries are low relative to other nations, and also are lower than they have been historically.

Tony Nash from Complete Intelligence focused on changes in the Chinese economy, asking whether the “Asian Century” is coming to an end. Consumption and growth are slowing in China while debt is rising. The country – like the United States – also is dealing with an aging workforce.

In addition to these predictions, Baumohl, Nash and Strauss also offered detailed analysis of the landscape for trade and infrastructure policy; energy production and the housing market; future construction and consumer spending; and the threat of cyberwarfare.

Participants at this year’s conference praised the speakers for their “depth of knowledge,” interesting perspectives and analysis of data.

MSCI’s 2020 Economic Summit will be held Sept. 14-15, 2020 in Schaumburg, Ill. Information will be coming over the next several months and will be available here.