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Signs of recession are constantly being researched, and a top Chief Economist has determined a couple ways and how he believes the next recession will appear

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Logan Cyrus | Bloomberg | Getty Images

HONG KONG - Investors trying to sniff out signs of the next recession should pay attention to any increase in unemployment rather than movements in bond yield curves and manufacturing, says Credit Suisse Chief Economist James Sweeney.

The question of when the next downturn will hit is always worrisome. Recent movements in the U.S. bond market in the form of an inverted yield curve - which occurs when short-term rates surpass longer-term yields - drew a lot of attention, as it's often seen as a recession warning. The weakness in global manufacturing has also raised concerns.

Still, Sweeney says those are not currently compelling reasons to be alarmed. The overall labor market is what investors want to watch, he said Thursday during a presentation at the Credit Suisse Asian Investment Conference in Hong Kong.

"That's not such a lead indicator for recessions anymore, in my view," said the economist, referring to the inverted yield curve and manufacturing data.

He said that developed economies are racking up their lowest jobless rates since the early 1980s, and manufacturing ups and downs are less important for overall employment given demographic changes.

"There is a great surge in the demand for labor coming from the personal care industries, health care industry, basically the demand for human attention by aging people," he said. "And it's very clear in the data that these sectors are driving substantial labor demand."

Recessions have become far less frequent in the last three or four decades because the "cyclical part of the labor market" in the United States is smaller now, he said.

"The threshold for achieving recession is just harder when you have less manufacturing and less construction," Sweeney added.

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credit suisse asian investment conference 2019

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Looking for recession signs? Follow the jobs, says Credit Suisse economist

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Logan Cyrus | Bloomberg | Getty Images HONG KONG - Investors trying to sniff out signs of the next recession should pay attention to any increase in unemployment rather than movements in bond yield curves and manufacturing, says Credit Suisse Chief Economist James Sweeney. The question of when the next downturn will hit is always worrisome.

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Investors are determining when the next signs of recession will appear and what kind of things we should be looking for. A Chief Economist James Sweeney points toward unemployment and how that will be one of the biggest signs to look for. Though many said before that movements in bond yield curve and manufacturing is one of the main ways in determining when the next recession will occur.  Earlier this year the US bond market scared many people as there were many signs of a recession.

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Tsang, Amie. “What's Driving Automakers Out of Europe?” The New York Times, The New York Times, 15 Mar. 2019, www.nytimes.com/2019/03/15/business/cars-brexit-europe-technology.html.
dated accessed 3-31-19

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Automakers are slowly moving out the EU and many are wondering why. Though there is no set reason for the departure of the manufactures but a combination of negative factories affecting the industry

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Blame has been cast on events like Brexit, but there are other changes that are reshaping the industry globally.

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The factory in Sunderland, England, where Nissan was going to produce its next X-Trail sport utility vehicle -- until it decided to do the work in Japan instead. Credit Credit Oli Scarff/Agence France-Presse - Getty Images

Automakers, in quick succession, have moved in recent weeks to end parts of their operations in Europe. Nissan is the latest: On Tuesday, it confirmed that it would cease assembling Infiniti cars at its plant in northeast England.

The moves, during Britain's wrenching debate over its departure from the European Union, known as Brexit, have raised the question: Is Brexit forcing the carmaking industry out of Britain?

It's not quite so simple. Traditional car manufacturers, in Britain and in Europe over all, have been buffeted by forces around the world, and they assess where they want to make the next model of a car every few years or so.

As automakers allocate resources, they have been balancing the need to respond to these changes with the justifications for producing cars in places like Britain.

Here are some of the forces reshaping the industry.

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Takahiro Hachigo, the president of Honda, which has said it will shut down its factory in Swindon, England, by 2021. Credit Tomohiro Ohsumi/Getty Images

Hondasaid it would close its plant in Swindon, England, by 2021 and stop making one of its sedans in Turkey. The Swindon plant employs 3,500 and the Turkish plant about 1,100.

Nissanreversed an earlier decision by deciding to produce the next generation of its X-Trail sport utility vehicle in Japan instead of Sunderland, England. Its luxury brand, Infiniti, is withdrawing from Western Europe altogether.

Ford said in January that it would cut thousands of jobs across Europe.

Jaguar Land Rover announced in January that it would be cutting 4,500 people from its global work force; most of the cuts are expected to be in Britain.

Dyson, which is developing an electric car, moved its headquarters from Britain to Singapore the same month.

General Motors pulled out of Europe in 2017, selling the Opel and Vauxhall brands.

In the wake of Volkswagen's diesel-cheating scandal in 2015, when it used software to trick emissions tests, awareness of the harmful effects of fossil fuels has prompted stricter regulation throughout the Continent.

Some German cities are banning older diesel engines in an effort to reduce pollution in urban areas. London has initiated a levy on drivers of older diesel vehicles. Britain and France plan to phase out sales of new diesel and gasoline-powered cars by 2040.

In the meantime, more governments, drivers and carmakers are pivoting to electric vehicles. Cars running on alternative fuels made up 6 percent of new car registrations last year in Europe, up from 4.8 percent in 2017, according to JATO, an auto industry research firm.

Norway is aiming to sell only electric cars by 2025, while India is aiming to be all electric by 2030.

Carmakers are racing to respond. Volkswagen said Tuesday that it intended to sell 22 million electric cars over the next 10 years, compared with its previous goal of 15 million, and that the company would aim to be carbon neutral by 2050.

The investments necessary for building electric cars have added to cost pressures for automakers that, in some cases, have struggled to turn a profit in Europe.

In justifying the closing of its Swindon factory, Honda said it wanted to focus on electrification. "The significant challenges of electrification will see Honda revise its global manufacturing operations, and focus activity in regions where it expects to have high production volumes," the company said.

As carmakers channel billions of dollars into grabbing a portion of the electric car market, many are looking to China, which is the world's largest maker and seller of electric cars.

China wants one in every five cars sold to run on an alternative fuel by 2025, and officials have said the country will get rid of internal combustion engines in new cars altogether. The country's rules also require carmakers to sell more alternative-energy cars if they want to continue selling regular models.

This has prompted car companies to realign where they make and develop cars.

Tesla has opened a factory there. Volkswagen signed an agreement with the Anhui Jianghuai Automobile Group last year to develop an electric vehicle. General Motors has made China the hub of its electric car research and development, while both Renault-Nissan and Ford have joint electric-car ventures in China.

In their efforts to grab a share of the growing market for electric cars, traditional car companies are competing not just with each other but also against technology companies.

Uber, Alphabet and Tesla are channeling money into electric cars and autonomous cars, while reshaping the way people travel with ride-hailing services.

This has prompted rivals to team up, or to work with the technology companies, so that they are not left behind.

Ford and Volkswagen formed an alliance in January to share technology for electric and self-driving vehicles, and save money.

BMW and Daimler announced in February that they would collectively invest 1 billion euros in a joint venture focused on offering services like car-sharing and electric charging points.

Audi, BMW and Daimler have joined forces to buy a digital mapping company. Daimler has teamed up with Uber on autonomous vehicles.

BMW is working with the chip maker Intel and Mobileye, an Israeli tech company, to develop a self-driving car. It is also in a partnership with IBM to use artificial intelligence to adapt vehicles to owners' preferences.

Fiat Chrysler is working with Google on self-driving cars, General Motors invested $500 million into Lyft, and Volvo provided the chassis for Uber's driverless car tests.

This shift has accelerated change and added to costs, said Peter Wells, a professor at the Center for Automotive Industry Research at the Cardiff Business School in Wales. And that has prompted companies to scrutinize whether they should maintain operations in markets that are not expected to grow and could become more difficult to serve.

"Companies around the world are having to re-evaluate their positions," Mr. Wells said.

The European car market is not growing. Annual car sales there peaked in 2007 at about 16 million. They're at about 15 million now, according to JATO.

It is also a saturated market, dominated by European marques, and favors smaller cars. Carmakers hungry for profits generated by pickup trucks and S.U.V.s are looking elsewhere for growth. Sales of S.U.V.s in Europe are still far behind those in China and the United States.

The Italian-American company Fiat Chrysler said in February that it planned to expand its capacity in the United States by updating several plants. They will produce large Jeep models.

Certainly, even promising regions face challenges. In the United States, many believe that car sales have peaked, forcing the idling of some factories. And the economic slowdown in China has sent car sales plummeting.

But in announcing its withdrawal from Western Europe, Infiniti said it intended to focus on its S.U.V. in North America and its new models in China.

Against this backdrop, the uncertainty surrounding Britain's departure from the European Union has made it difficult for companies to plan ahead. Several car companies have said they will close their factories temporarily after the country leaves the bloc in order to adjust to the disruptions that could arise.

The fear is that Brexit could cause havoc with the carefully choreographed just-in-time production processes at assembly plants. In Britain, more than half of the components in cars come from the European Union, entering seamlessly on trucks from the Continent and arriving within minutes of being fitted in the final product.

After Brexit, those trucks could face substantial delays if they must go through customs checkpoints. Without a clear sense of the terms of Britain's scheduled departure in a couple of weeks, making plans for production a few years down the line is more difficult. Investment into Britain's auto industry fell by half last year.

​Amie Tsang is a general assignment business reporter based in London, where she has covered a variety of topics, including the gender pay gap, aviation and the London Fatberg. @amietsang

A version of this article appears in print on , on Page B3 of the New York edition with the headline: What's Driving Automakers Out of Europe? It's Not Just Brexit. Order Reprints | Today's Paper | Subscribe

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What's Driving Automakers Out of Europe?

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Blame has been cast on events like Brexit, but there are other changes that are reshaping the industry globally. Automakers, in quick succession, have moved in recent weeks to end parts of their operations in Europe. Nissan is the latest: On Tuesday, it confirmed that it would cease assembling Infiniti cars at its plant in northeast England.

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Automakers in Europe are slowly moving out to other areas for many different reasons including departure of the EU. The industry for cars hasn’t been the same lately as local government around the EU are pushing for more electric cars than standard automotive vehicles. This has caused producers to struggle to stay afloat in the EU and still make a profit. That is why it has come to the point now where they are being forced to move somewhere else to produce where they can reach the same numbers again

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Tsang, Amie. “What's Driving Automakers Out of Europe?” The New York Times, The New York Times, 15 Mar. 2019,
www.nytimes.com/2019/03/15/business/cars-brexit-europe-technology.html.
dated accessed 3-31-19

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Wells Fargo CEO has stepped down, after numerous scandals and unethical work practices emerge.

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Wells Fargo CEO Tim Sloan will step down immediately, the company announced Thursday.

"It has become apparent to me that our ability to successfully move Wells Fargo forward from here will benefit from a new CEO and fresh perspectives," Sloan said as part of the announcement.

He is the second Wells Fargo CEO to resign in about 2 1/2 half years, as the big bank has been buffeted by scandals. The most prominent involved bankers creating deposit and credit card accounts for millions of customers without their knowledge.

Wells Fargo was ordered to pay $185 million in penalties and fines in 2016 for creating unwanted accounts by the Consumer Financial Protection Bureau.

Earlier this month, Sloan testified before Congress, assuring the House Financial Services Committee that "Wells Fargo is a better bank than it was three years ago, and we are working every day to become even better."

But lawmakers from both political parties were skeptical.

And a few days later, the company revealed in a filing to a government regulator that Sloan would be getting a $2 million bonus for 2018.

That prompted California Democrat Maxine Waters, who runs the House Financial Services Committee, to call for him to be "shown the door."

The troubles have been mounting for Wells Fargo over the years.

In an unrelated case, the consumer bureau also imposed a $1 billion fine against Wells Fargo for overcharging customers for mortgages and auto loans. The fine was part of a larger settlement of charges the bank originated and sold mortgage loans that included false information in the years leading up to the financial crisis.

Sloan took over as CEO when John Stumpf stepped down in October 2016, in the wake of outrage over the accounts scandal.

Sloan said during the hearing that as many as 3.5 million unauthorized accounts had been opened, according to an audit.

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Wells Fargo CEO Quits In Wake Of Consumer Financial Scandals

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Wells Fargo CEO Tim Sloan will step down immediately, the company announced Thursday. "It has become apparent to me that our ability to successfully move Wells Fargo forward from here will benefit from a new CEO and fresh perspectives," Sloan said as part of the announcement.

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Wells Fargo Ceo will be stepping down announced by the banking organization on Thursday amid all the scandals surrounding him and the bank. Wells Fargo Ceo Tim Sloan released a statement stating, “It has become apparent to me that our ability to successfully move Wells Fargo forward from here will benefit from a new CEO and fresh perspectives.” The scandals involved deposit and credit card accounts being created without the authorization from the owners of them. In the end millions of accounts had been breached and used creating a multitude of fines ordered by the Consumer Financial Protection Bureau.

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Liberto, Jennifer. “Wells Fargo CEO Quits In Wake Of Consumer Financial Scandals.” NPR, NPR, 28 Mar. 2019, www.npr.org/2019/03/28/707738077/wells-fargo-ceo-quits-in-wake-of-consumer-financial-scandals.
Dated accesssed 3-31-19

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President Trump has been quick to spread the word that the economy is booming and has been better than ever. Though in review with the past decade there has been hardly any change at all with little growth. This article explores why we are projecting too high and an overview of the growth in the past 10 years.

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[Sign up for David Leonhardt's daily newsletter with commentary on the news and reading suggestions from around the web.]
The second big cause is an investment slump. Despite all the savingsavailable to be invested, companies are holding back. Some have grown so large and monopoly-like that they don't need to invest in new projects to make profits. Think about your internet provider: It may have terrible customer service, but you don't have a lot of alternatives. The company doesn't need to invest in new technology or employees to keep you as a customer.

Beside a lack of competition, the investment slump stems from what Summers calls the de-massification of the economy. Developers aren't building as many malls and stores, because goods now go straight from warehouses to homes. Offices don't need as much storage space. Cellphones have replaced not just desktop computers but also cameras, stereos, books and more. Many young people have decided they're happy living in small apartments, without cars.

For all of these economic problems, there are promising solutions. But the United States is not giving those solutions a try.

The 2017 Trump tax law is a useful case study. It is a dreadful piece of economic policy - essentially a giant effort to aggravate income inequality. Tax cuts that benefit the wealthy most are huge and permanent. Tax cuts focused on everyone else are smaller and temporary.

But the law still pumped money into the economy last year, thanks largely to those temporary tax cuts for the middle class and poor. And guess what? G.D.P. growth finally met some forecasters' expectations, as you can see from the first chart above. The economy expanded 2.9 percent in 2018. Unfortunately, the boost seems to have been temporary. In the first quarter of this year, growth has slowed markedly, probably to about 0.5 percent. It will most likely grow faster over the rest of 2019, but not 3 percent. Once again, economists have started downgrading their expectations.

A better policy response would start with a tax cut focused on the majority of Americans, not the wealthy. And there are many other ways to take on secular stagnation. When I spoke to Summers last week, he rattled off a list:

Infrastructure projects, to jump-start investment. The retirement of coal-fired power plants, which would also lead to new investment. Stronger safety-net programs, including Social Security, to reduce the savings glut. More aggressive antitrust policies, to combat monopolies. And a Federal Reserve that, at long last, stopped making the same mistake - of overestimating both growth and inflation.

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Opinion | The Experts Keep Getting the Economy Wrong

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Sign up for David Leonhardt's daily newsletter with commentary on the news and reading suggestions from around the web.] The second big cause is an investment slump. Despite all the savingsavailable to be invested, companies are holding back. Some have grown so large and monopoly-like that they don't need to invest in new projects to make profits.

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President Trump has constantly been flaunting about the state of the economy and what great shape it is in. Though in reality it really hasn’t changed at all, and by changed at all its remained below 3% still to this day since 2010. With 3 percent still being extremely low for growth it is time to understand why. In a chart created by the federal reserve it was shown that every year economists were being way too optimistic with their predictions. With the predictions being wrong and too optimistic it causes the fed to re-work things in a downward trend.

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Leonhardt, David. “The Experts Keep Getting the Economy Wrong.” The New York Times, The New York Times, 10 Mar. 2019, www.nytimes.com/2019/03/10/opinion/us-economy-stagnation-growth.html?rref=collection/timestopic/Economics&action=click&contentCollection=timestopics®ion=stream&module=stream_unit&version=latest&contentPlacement=5&pgtype=collection. date accessed 3-31-19

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China's economy in a new review is slowly stabilizing allowing global investors relax as the production giant creeps back to it's old numbers

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Global economists were very worried for China as the growth in their economy had plummeted from being one the largest global economies in the world. Though after a study in March, it shows that China is slowly rising out of its drought and will progressively get better throughout the rest of the year. A leveling in China’s economy can have a huge effect on the entire global economy because of involvement of China in the global economy. They put out way too much to not have an impact which is why it is very important to continue to keep a close eye out on China.

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Pi, Xiaoqing. “China's Factory Rebound Heralds Improvement in Global Outlook.” Bloomberg.com, Bloomberg, 31 Mar. 2019, www.bloomberg.com/news/articles/2019-03-31/china-s-factory-rebound-heralds-improvement-in-global-outlook. accessed on 3-31-19

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The Federal minimum wage hasn't changed in 8 years and with a stable economy in the United States at the moment, gives a great opportunity to raise the minimum wage.

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Why It's the Perfect Time to Raise the Federal Minimum Wage

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With a healthy economy, voters in support and businesses raising wages anyway, Congress should act now

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Eight years have gone by since the last change of the federal minimum wage. Since then the economy has rebounded and employment has gone up. Though people are stuck working at the minimum wage of $7.25 an hour even though economically we are doing better. Having a full-time job shouldn’t mean a life living in poverty.

That low of a wage doesn’t allow someone to live life comfortably. If wages were raised even slightly it would allow people that do get minimum wage to have more money. A quote from the article “It’s a simple, but critical, concept: take care of your people and they will take care of your customers.” Larger organizations are starting to implement higher wages as they see an increase in employee satisfaction at work.

It would be a great idea to give people a better chance at life with higher wages. Employees will have a higher chance of working more efficiently as well as them being happy in their own work. The higher wage will make people feel more important and they are a part of something bigger. This will allow greater opportunities for all of America as well as the consumers that will be interacting with those employees as well.

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Lu, Chris. Time. July 24, 2019. https://www.economist.com/finance-and-economics/2019/01/26/the-market-for-cyber-insurance-is-growing
accessed 2-10-19

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The US Economy isn't looking too bad at the moment after being analyzed by economists. With that being said Trump's policies are slowing growth for Americans and making trade almost impossible. This article clearly shows that with the right policies in place, the economy can be in a good standing but also can be in the position to grow at a faster rate.

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Economic View

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President Trump delivering the State of the Union last year. As he prepares to give this year's address, economists are taking issue with his policies even though the United States economy is in good shape, our columnist writes. Credit Credit Gabriella Demczuk for The New York Times

When President Trump delivers his State of the Union address on Tuesday, he can quite justifiably say that the state of the economy is good.

Unemployment is low, inflation is muted and growth has continued unabated for nearly 10 years. As a college professor, I'm often drawn to giving letter grades, and would give the United States economy an A-, with the potential for a better grade if the economic gains had been distributed more evenly.

But Mr. Trump controls economic policy, not the economy, and so a fairer report card would also assess his actual policies.

To provide a nonpartisan appraisal, I've reviewed surveys of about 50 leading economists - liberals and conservatives - run by the University of Chicago. What is startling is that the economists are nearly unanimous in concluding that Mr. Trump's policies are destructive. That is why many economists are uneasy about his presidency, even though the economy earns solid grades.

Mr. Trump's protectionist impulses place him squarely at odds with the economic wisdom that tariffs are harmful. Worse, by imposing tariffs on goods like aluminum and steel Mr. Trump's trade policy has also damaged the competitiveness of American manufacturers. None of the economists taking part in the surveys agreed with the claim that these tariffs would "improve Americans' welfare," and all of them said global supply chains had made these tariffs more costly than they would have been in the past.

The United States started a trade war with China and China quickly retaliated, raising tariffs on American-made goods. Mr. Trump also created needless uncertainty with his threat to rip up the North American Free Trade Agreement that binds the United States, Canada and Mexico. The threat yielded a substitute deal that market economists believe will do little more than replicate the previous one, and it is unclear that Congress will pass it.

Criticism of Mr. Trump's protectionist instincts is widespread. When he said on Twitter that he was "Tariff Man," financial markets tanked. An analysis conducted by the president's own Council of Economic Advisers has reportedly concluded that his tariffs will reduce economic growth. Even by Mr. Trump's own preferred metric, the balance of trade, his policy has failed: The trade deficit has risen to a 10-year high.

The logic of fiscal policy is straightforward: In good times, the government should spend less, so that in bad times it can afford to spend more and tax less, helping to support an ailing economy. When private-sector demand falls, government picks up the slack.

On this score, Mr. Trump's fiscal policy is a colossal failure. His signature achievement is a $1.5 trillion tax cut that provided stimulus when, arguably, it was least needed. As a result, the budget deficit is atypically high for a healthy economy, and rising government debt will make it hard for fiscal policy to provide a boost when the next downturn hits.

Mr. Trump might argue that the point of the tax cut wasn't to provide a short-term stimulus, but rather to promote long-term economic growth. However, economists say that it will fail to do that, too. In a survey before the bill was passed, all but one expert said the tax cut wouldn't lead gross domestic product "to be substantially higher a decade from now." Darrell Duffie, the lone dissenter, said it would boost growth, but he added that "whether the overall tax plan is distributionally fair is another matter."

The problem, according to Daron Acemoglu, a prominent macroeconomist, is that while "simplification of the tax code could be beneficial," that effect would most likely be "more than offset by its highly regressive nature." Recent data support this pessimism, as the much-promised investment boom the tax cut was supposed to deliver appears not to have materialized.

It is worth noting that the one part of Mr. Trump's platform that received a strong endorsement from economists - his promise of infrastructure spending - has languished, despite the possibility of bipartisan support.

For a president, monetary policy should be simple: Appoint good people, and let the Federal Reserve do its job. Mr. Trump has got half of this right. Jerome Powell, his pick for Fed chairman, has so far proven to be adept. In a recent survey, 43 percent of economists gave Mr. Powell's leadership an A, and 51 percent gave him a B (with the remaining 6 percent giving him a C). Mr. Trump's other Fed appointments have been mainstream, yielding a cast of policymakers that Jeb Bush might have appointed had he been elected president.

But Mr. Trump has dragged down his grade in this category by meddling in ways that have needlessly complicated the Fed's job. Most industrialized countries, including the United States, have generally insulated monetary policy from political pressure, believing that such independence helps policymakers deliver low and stable inflation. Yet Mr. Trump has repeatedly criticized Mr. Powell for not setting interest rates lower, and has reportedly raised the possibility of firing him. The president is playing a self-defeating game, because he is making it harder for Mr. Powell to deliver low rates without appearing to have been bullied by Mr. Trump.

Mr. Trump isn't just pushing against one or two threads of economic consensus. Instead, his program is an almost complete repudiation of the orthodoxies endorsed by Democratic and Republican economists.

Put the pieces together, and all of this presents a puzzle: If economic policy is so bad, why is the economy doing so well?

Perhaps it reflects good luck rather than good judgment. Mr. Trump's luck was to inherit an economy that had been on a steadily improving glide path since around 2010. Charting nearly any economic statistic shows that today's economic strength represents a continuation of that trend.

Even if Mr. Trump doesn't deserve credit for this trajectory, he should get some credit for not knocking the economy off this path. Unless, of course, the real explanation is that the president doesn't have much effect on economic outcomes.

The more frightening explanation is that the downside of Mr. Trump's policies are yet to become evident. The chaos of his administration's policy process has created uncertainty and probably scared off some investors, although their absence is difficult to measure. In addition, Mr. Trump's unfunded tax cuts are creating a debt that future generations will have to repay. And by undermining the Fed's independence, he may have made it less effective at fighting inflation.

That's not all.

Cutting regulations in the financial sector may help big banks today, but it could increase the chances of future financial crises. Eliminating environmental regulations has probably improved results for some businesses while speeding climate change. And while impeding immigration may have reduced competition for jobs, many economists worry that in the longer run, reducing the number of immigrants will lead to less innovation and growth.

Of course, I should admit a final possibility: Perhaps Mr. Trump has got it right, and the economists have gotten it all wrong. As a card-carrying economist, I don't believe this, but it seems that, in equal measure, Mr. Trump doesn't believe what economists say, either.

Justin Wolfers is a professor of economics and public policy at the University of Michigan. Follow him on Twitter: @justinwolfers.

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An A- for the U.S. Economy, but Failing Grades for Trump's Policies

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Economic View When President Trump delivers his State of the Union address on Tuesday, he can quite justifiably say that the state of the economy is good. Unemployment is low, inflation is muted and growth has continued unabated for nearly 10 years.

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The State of the Union address on Tuesday will be interesting depending upon what Trump brings up. One thing for sure is many economists despite the low approval percentage see the economy in a good standing at the moment. With unemployment low and inflation down, it is safe to say many can agree and say it fine but not great. Though this is only looking at the economy and not policies being put in place or being taken away by the president.

Looking first into trade Trump has done thing but make it more difficult for Americans. For example, placing tariffs on aluminum and steel have only made it tougher for American manufactures. The economists from the article even stated that they did not agree it will “improve Americans’ welfare.” Next looking into Fiscal Policy, it is most helpful to cut spending when the government doesn’t need to so when Americans do need the tax break it is helpful. Though some will argue he gave a 1.5 million tax break earlier in the year. Though many economists find it is not needed and will not leave us better off in the long run.

It is shown in the article that the economy may be in a “ok” standing. Though the president is slowly halting growth by foolish tariffs and policies making it harder in the long run.

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Wolfers, Justin. The New York Times. February 4, 2019. https://www.nytimes.com/2019/02/04/business/us-economy-trump-taxes-trade.html . accessed 2-4-19

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World Economy Stuck in Slow Growth - Week#1

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World Economy Stuck in Slow Growth - Week#1

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The era of slow progression is still glooming over the world with no signs of growth

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Just when we thought we were out, global deflationary forces have pulled us back in.

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The New York Stock Exchange this month. Markets went haywire at the end of 2018, but what story were they telling? Credit Johannes Eisele/Agence France-Presse - Getty Images

Fears of an imminent recession, which caused major turbulence in financial markets at the end of 2018 and beginning of 2019, have eased a bit.

That's the good news. The bad news is what that episode exposed.

For much of 2018, it appeared that the world economy was finally getting out of the rut it had been stuck in for the decade since the global financial crisis. But it now looks as if the era of persistently low growth, low inflation and low interest rates isn't over after all.

In the past week alone, the European Central Bank said that economic risks had "moved to the downside," and the Bank of Japan cut its projections for inflation.

The Federal Reserve will hold a policy meeting Tuesday and Wednesday, and is likely to leave its interest rate target unchanged. Its leaders could also discuss their broader strategy for making monetary policy, which may include keeping more of their giant portfolio of bonds - accumulated during its years of stimulus efforts - than analysts had once expected.

Despite some promising signs of vitality during much of last year, issues that have dogged the world economy for the last decade - an aging work force in many of the biggest economies, weak growth in productivity, excessive global savings and industrial capacity, and a shortage of worldwide demand - haven't disappeared.

That helps explain why American workers' wages have been rising relatively slowly despite a low unemployment rate. And it makes for a perilous time: Low growth rates mean the economy could slip into recession more easily, and low interest rates mean central bankers would find themselves with less powerful tools to lessen the pain of a future downturn.

"This shows that the forces that are restraining many economies are a lot harder to contend with and more pervasive than many people were hoping or believing," said Roberto Perli, a partner in Cornerstone Macro. "It's bad news for the work force's earnings prospects in many countries and for those who hope for a reversal of the growing inequality trend that has been in place for many years."

Consider that markets went haywire in the final weeks of 2018 in significant part because of fears that the Federal Reserve was raising rates by more than the economy could handle. Jerome Powell, the Fed chairman, played a big role in fueling a stock market rebound when, on Jan. 4, he pledged that the Fed would adjust policy "quickly and flexibly" as conditions warranted.

His predecessor, Janet Yellen, went so far as to say recently that "it's very possible we may have seen the last interest rate hike of this cycle." But what does it mean when a mere 2.4 percent interest rate - the rough level of the Fed's target after a December increase - is enough to risk breaking the economy?

The story is even more pessimistic in the European Union, where interest rates are slightly below zero and yet growth is faltering.

With the world economy heavily reliant on stimulus to achieve even meager growth, there is little cushion for a negative shock. In particular, it makes the United States more vulnerable to recession caused by any number of factors, including government shutdowns and trade wars.

Adam Posen, president of the Peterson Institute for International Economics, said, "If this is what growth and investment look like when there is relatively loose monetary and fiscal policy - especially in the U.S. - the underlying strength just isn't there.

"That doesn't mean policy is ineffective or ill-advised. Things would be much worse, unnecessarily, if policy tightened a lot. But it is scary to think of the world economy absent macro support," meaning the stimulus provided by low interest rates and large deficits.

There is the risk of a nasty feedback loop. The low-growth trap of the last decade - and the resulting stagnant incomes - might have contributed to dysfunctional politics in nations including Britain, Italy and the United States. Those dysfunctional politics in turn can create new risks of economic disruption, as we saw in the recent shutdown standoff in Washington.

Last year began with signs of a new economic era. In early February, the stock market was falling amid concerns that the United States economy was overheating; that wages and prices would start rising too fast; and that the Fed would need to raise interest rates faster to rein things in. Shifts in bond markets suggested investors were betting on higher future inflation, and on higher interest rates in the distant future than in the near future.

For the first time in ages, most of the major advanced and emerging economies were enjoying simultaneous growth surges. As 2018 progressed, inflation in the United States finally moved back up to the 2 percent level that the Federal Reserve targets, and the Fed's pattern of once-a-quarter rate increases became mostly a nonevent in markets.

It was starting to look as if the old economic rules - that low unemployment would translate into higher inflation, that large government deficits would crowd out private investment - were becoming true again.

But in the sell-off that knocked about 10 percent off the S&P 500 from the start of October to Christmas Eve, long-term interest rates fell by more than half a percentage point. Bond prices pointed to lower future inflation, as did plunging oil prices.

The expected annual inflation rate in the next decade - reflected in the price of inflation-protected bonds - rose to 2.18 percent in April 2018 from 1.66 percent in June 2017. It hovered in the 2.18 range for a few months, then plunged in late October to a recent low of 1.7 percent.

And prices in futures markets reflected expectations that the Fed would enact no more interest rate increases in 2019. Even as the consensus view of Fed officials at their December meeting was that two interest rate increases were on tap for 2019, markets were essentially flashing a signal of "Oh no, you don't."

At the same time, weaker growth in China - a reported 6.6 percent in 2018, still strong by American or European standards - removes a source of strength for the global economy. China is trying to wean itself off debt-driven growth.

"Chinese policymakers are well aware they probably have a credit bubble and have tried to be more temperate in response to the current slowdown," said Julia Coronado, president of MacroPolicy Perspectives. "But it is hard to accept low growth potential. We see the political instability that that brings around the world, and China is now faced with the uncomfortable decision of re-initiating stimulus or living with notably slower growth."

The world economy is not in crisis. Low growth is better no growth - or outright contraction.

But what the last few months have made clear is that the forces that have held back the global economy for the last 11 years are not temporary, and have not gone away. And that, in turn, makes the world uncommonly vulnerable to a bout of bad luck or bad policy.

The low-growth world was not just a phase. It's the new reality beneath every macroeconomic question and debate for the foreseeable future.

Neil Irwin is a senior economics correspondent for The Upshot. He previously wrote for The Washington Post and is the author of "The Alchemists: Three Central Bankers and a World on Fire." @Neil_Irwin * Facebook

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The World Economy Just Can't Escape Its Low-Growth, Low-Inflation Rut

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Just when we thought we were out, global deflationary forces have pulled us back in. Fears of an imminent recession, which caused major turbulence in financial markets at the end of 2018 and beginning of 2019, have eased a bit. That's the good news. The bad news is what that episode exposed.

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The financial market was looking very shaky at the end of 2018 and have slowly eased away going into the new year. Recently across the globe European banks have put economic risks at “moved to the downside”. As well as Bank of Japan where it cut its projections for inflation. Even though recently it has looked very promising there are some serious major problems occurring in the world still. There is still a very small world economic growth, industrial capacity, and a shortage in worldwide demand.

A quote that summarizes a good portion of this article is “This shows that the forces that are restraining many economies are a lot harder to contend with and more pervasive than many people were hoping or believing.” Said by Roberto Perli a partner in Cornerstone Macro. The markets in 2018 went crazy because the federal reserve was suspected of planning on raising rates higher than the economy could handle at the moment. It is shown that the world economy is reliant on a stimulus to get any growth whatsoever. Though with the United States vulnerable to recession caused by the multiple reasons like government shutdowns and trade wars, it is very hard to speculate that anything positive is close to come.

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Irwin, Neil. The New York Times. January 27, 2019. https://www.nytimes.com/2019/01/27/upshot/world-economy-low-growth-low-interest-deflation.html accessed at 1/27/19