AP, Washington :
How fragile is the global economy? The U.S.-China trade war is weakening businesses in both countries, Germany’s economy shrank in the second quarter, and Britain appears headed for a disruptive exit from the European Union this fall.
Those trends have hammered American manufacturers and caused global financial markets to plunge on fears that the world’s largest economy could slip into a recession.
Yet most analysts expect the U.S. economy to power through the rough patch, at least in the coming months, on the strength of solid consumer spending and a resilient job market.
The U.S. stock market plummeted earlier this week when the bond market, spooked by the global turmoil, sent a possible early warning sign of a recession ahead: The yield on the benchmark 10-year Treasury note slipped briefly below 2-year Treasury yields.
That is an unusual shift that indicates investors expect the U.S. economy to expand much more slowly in the coming months. The shift has preceded at least the last five U.S. recessions, though as much as two years can pass before a recession actually hits.
Still, most economists were buoyed by a robust retail sales report Thursday that suggested that American consumers aren’t fretting about bond yields. Sales at U.S. stores and restaurants jumped in July by the most in four months. Online sales soared to their best showing since January. Spending at restaurants is a sign of confidence, given that most people eat out when they feel they have money to spare.
How fragile is the global economy? The U.S.-China trade war is weakening businesses in both countries, Germany’s economy shrank in the second quarter, and Britain appears headed for a disruptive exit from the European Union this fall.
Those trends have hammered American manufacturers and caused global financial markets to plunge on fears that the world’s largest economy could slip into a recession.
Yet most analysts expect the U.S. economy to power through the rough patch, at least in the coming months, on the strength of solid consumer spending and a resilient job market.
The U.S. stock market plummeted earlier this week when the bond market, spooked by the global turmoil, sent a possible early warning sign of a recession ahead: The yield on the benchmark 10-year Treasury note slipped briefly below 2-year Treasury yields.
That is an unusual shift that indicates investors expect the U.S. economy to expand much more slowly in the coming months. The shift has preceded at least the last five U.S. recessions, though as much as two years can pass before a recession actually hits.
Still, most economists were buoyed by a robust retail sales report Thursday that suggested that American consumers aren’t fretting about bond yields. Sales at U.S. stores and restaurants jumped in July by the most in four months. Online sales soared to their best showing since January. Spending at restaurants is a sign of confidence, given that most people eat out when they feel they have money to spare.
