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October 18, 2019 | Global Recession Warnings

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel ( Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog:

As manufacturing slumps around the world, China reported an ‘official’ third-quarter GDP growth rate of 6% today–the weakest in about 30 years.  Consumption made up a record 60.5% of that growth compared with 55.3% in the first half of the year.  This compares with consumer spending making up roughly 70% of US GDP.

But with unemployment now coming off of record lows amid low savings, high debt, and manufacturing and business spending already in retreat, consumers will not be able to keep spending apace indefinitely.  See Can Shoppers Hold Up Global Growth?

Last week, US retail sales unexpectedly posted the first decline in seven months, adding to a long list of warning signs piling up for the global economy and inflated asset prices.

A weaker U.S. consumer means recession risk can’t be taken off the table, says Lakshman Achuthan, co-founder of the Economic Cycle Research Institute. Here is a direct video link.

‘Yellow flag on recession risk’: Top forecaster warns of cracks in consumer spending from CNBC.

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October 18th, 2019

Posted In: Juggling Dynamite

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