-October 28,2019-
Rabobank is now says the US economy is nearing a recession. In their October 2019 Agribusiness Review, the Dutch based bank reported the following.
The economic data released in recent weeks has been outright alarming. It points to a sustained and significant contraction in manufacturing, a slowdown in the services sector, and a slowdown in employment growth. There was even an unexpected slowdown in wage growth. While some may cling to the fact that employment is still growing at a rate that will keep unemployment very low, these labor market indicators are the last to turn red. By then, recession is around the corner. It should now be clear that the weakness in the manufacturing sector is spreading to the services sector. Once employment growth slows down further, unemployment will rise, and personal consumer spending will be affected. This would add to the likelihood of a recession. The economic data shows that, at the moment, weakness is already spreading through the economy. Therefore, we stick to our forecast of a US recession in the second half of 2020. In our view, the Fed will be forced to cut all the way back to zero before the end of 2020.
