Economists are Starting to Warn About the Risk of a New U.S. Recession
Confronted with disappointing data from around the world, economists are whispering a word that hasn’t seemed like areal possibility ∈ years: recession. It starts with the slowdown ∈China, which is already straining the global recovery. The world’s second-largest economy has lost its appetite for the raw materials that fueled its industrial boom, leaving the smaller countries that supplied it with resources stumbling ∈ its wake. Slower growth abroad translates into weaker foreign currencies and a stronger U.S. dollar, which makes American goods harder to sell ∈ the global marketplace.
A growing chorus of prominent economists and analysts are arguing those dynamics could tip the world -- and the United States along with it -- into recession within the next two years. The fear is showing up ∈ the recent wild swings ∈ financial markets, rare outside of broader economic downturns. The pace of U.S. job growth has slowed substantially compared to last year. And though the economic expansion has never quite reached many workers, it has actually lasted longer than the post-war average
“The global economy is uncomfortably close to the edge,” said David Stockton, senior fellow at the Peterson Institute for International Economics. […] Since World War II, recessions have occurred an average of every five years. The current expansion is more than six years old, beginning ∈July 2009. A recession is generally defined as two consecutive quarters of contraction, but an official designation is often not made until long after the decline has already begun.
The Great Recession started ∈December 2007 but was not officially diagnosed until a year later -- after the Dow Jones Industrial average had already fallen roughly 40 percent and more than 3.5 million workers had lost their jobs.
“A recession is inevitable ∈ the fullness of time. The question is when is one likely to occur?” said Jason Thomas, director of research at The Carlyle Group, a financial services and private equity firm.
Thomas said he doesn’t believe one is imminent. But themore important question, he said, is how damaging it would be if it occurred. Most economists, including Thomas, believe the next recession will likely be mild. The problem is that the nation’s top policymakers may have less power to combat it.
If anything, analysts worry that it will be officials ∈Washington who inadvertently send the economy over the edge. Bitterly divided lawmakers have no clear plan for averting a catastrophic default on the nation’s debt obligations next month or a shutdown of the federal government ∈December. The hurdle for any stimulus may be insurmountable.
The other backstop during the financial crisis was the Fed. The nation’s central bank slashed its key interest rate to zero ∈December 2008 and has pumped trillions of dollars into the economy. Seven years later, rates are still at zero and the Fed has maintained a $4.5 trillion balance sheet.
In other words, most of the central bank’s arsenal is already deployed.
Disponível em: <https://www.washingtonpost.com/>. Acesso em: 21 out. 2015. (Adaptado)
By analysing the text, it is understood that economists
