The Three Biggest Factors Driving the U.S. Economy Are Stalling

Escalating Trade Tensions Puts U.S. on Brink of Recession

The economy goes in cycles—expansion (growth), peak, and contraction (recession). It always has and always will. That doesn’t mean global economies don’t try and do everything possible to prevent a recession. Unfortunately, trade tensions between the U.S. and China, the two biggest economies, seems to be sending the U.S. and global economy to the brink of a recession. The U.S. implemented a new round of tariffs on September 1 with no signs of slowing down. While President Trump has said tariffs won’t hurt the U.S. economy (and are easy to win), it now appears as though the three factors that drive the U.S. are stalling, and the U.S. could enter a recession within the next 12 months.

The U.S. is the world’s biggest economy, if it goes into a recession, it hurts the entire global economy, especially Canada’s, since they are our largest trading partner.

What are the three factors? Government, business, and consumer spending. Because of the trade war, businesses have pulled back and business executives are becoming increasingly pessimistic. In early 2018, 79% of businesses executives were optimistic about the U.S. economy; today, that number stands at 42%—the lowest level in three years.1

While the U.S. government continues to spend freely and the deficit is at record levels, the way it spends isn’t expected to change much now that President Trump has signed a two-year budget deal into law.2

That means U.S. consumers will have to prop up the U.S. economy. Whether they can afford to or not is another question. U.S. consumer spending makes up slightly more than 70% of U.S. economic activity. And Americans spend based on where they think the economy is headed. If U.S. consumer sentiment is strong, they won’t put off buying a new car, furniture, electronics, or smart refrigerator. If it’s weak, spending slows, and along with it, the U.S. and global economy.

That’s a lot of responsibility for the consumer to shoulder.

One of the most reliable measures, The University of Michigan Consumer Sentiment Index, is flashing a warning. According to the survey, U.S. consumer sentiment is at its lowest level in three years and fell by the most since December 2012.3

Why? The fall in U.S. consumer sentiment is tied directly to U.S./China trade war. One in three of those surveyed cited the trade war. Other risks curbing consumer sentiment include higher inflation expectations, expected rising unemployment, and slowing wage gains.

Higher prices because of the trade war coupled with increased personal debt and less disposable income could translate into slower consumption and economic growth.

The effects of which could be seen as early as the second half of 2019. Most Americans also believe stocks will begin to fall in 2020; an all-important election year.

Learn-To-Trade.com, Canada’s Leader in Stock Market Trading Courses

On the surface, the U.S. economy looks solid, unemployment is low, and the economy continues to chug along. But the fact is, the U.S/China trade war is having a detrimental effect on the U.S. economy. And the three factors needed to sustain economic growth are pointing to a recession. Fortunately, the trading experts at Learn-To-Trade.com can show investors proven trading strategies that can help them profit no matter what the economy or stock market is doing.

Learn-To-Trade.com is Canada’s oldest and leading provider of stock market trading courses. Over the years, we have taught thousands of investors, of every skill level, how to trade more confidently and profit more consistently.

Through our stock market trading course, you will learn how to read charts and conduct a technical and fundamental analysis of any stock. You will also learn about foreign markets, commodities and futures trading, stock index trading, forex, and cryptocurrencies, as well as how to read economic cycles and spot market trends. We’ll also teach you about risk management and capital preservation.

At Learn-To-Trade.com, we understand that investors have different needs, that’s why we provide a unique, Lifetime Membership that allows you to re-attend any part of the program as often as you’d like.

To learn more about Learn-To-Trade.com’s stock market trading course, contact us at 416-510-5560 or by e-mail at info@learn-to-trade.com.

Sources:

  1. “Business Executives Take Sharply Dimmer View of U.S. Economy, AICPA Survey Finds,” American Institute of CPAs, September 5, 2019; https://www.businesswire.com/news/home/20190905005465/en/Business-Executives-Sharply-Dimmer-View-U.S.-Economy.
  2. Fabian, J. “Trump signs two-year budget deal,” The Hill, August 2, 2019; https://thehill.com/homenews/administration/455947-trump-signs-two-year-budget-deal.
  3. “U-M Surveys of Consumers: Tariffs weaken confidence,” University of Michigan, August 30, 2019; https://news.umich.edu/u-m-surveys-of-consumers-tariffs-weaken-confidence/.

Photo credit: iStock.com/artisteer

The following two tabs change content below.
George Karpouzis is the co-founder of Learn-to-Trade and has been personally providing education and mentoring to over 3000 members since 1999. George has been trading in the stocks, options, futures and forex markets using technical analysis since 1986. With the help of advancements in trading technology the Learn To Trade program is now accessible worldwide. His background and passion for teaching brings an invaluable asset to our members. George is constantly striving to improve the program content and develop new strategic relationships for the benefit of the members. Add me to your G+

Testimonial 1

Don’t hesitate jump into it right now. You will be glad you did!

Susan C

Learn To Trade
4.0
2014-08-19T04:45:40-04:00

Susan C

Don’t hesitate jump into it right now. You will be glad you did!

Testimonials 2

The ongoing support has been the reason for my success

Patrick L

Learn To Trade
4.0
2014-08-19T04:46:33-04:00

Patrick L

The ongoing support has been the reason for my success

Testimonial 3

I wanted to let you know that I had taken your course in the fall of 2013. I took your advice and used demo accounts for the last quarter of 2013. I switched to real money trading account in the Near Year, when I finally felt comfortable. Following the lessons taught to me by you (don’t jump on a moving train, peaks and valleys, EMA..etc), I wanted to let you know that I have been successful beyond my own expectations. Thank you very much – taking the Learn-to-Trade course was, by far, the best decision I made in my business career.

Steven R

Learn To Trade
4.0
2014-08-20T02:56:18-04:00

Steven R

I wanted to let you know that I had taken your course in the fall of 2013. I took your advice and used demo accounts for the last quarter of 2013. I switched to real money trading account in the Near Year, when I finally felt comfortable. Following the lessons taught to me by you (don’t jump on a moving train, peaks and valleys, EMA..etc), I wanted to let you know that I have been successful beyond my own expectations. Thank you very much – taking the Learn-to-Trade course was, by far, the best decision I made in my business career.

Joseph L

The past options and forex tutorials taught by George were very helpful. I find these tutorials invaluable for a busy person like myself. I was able to keep myself up to date and on track ready to continue the learning process. Thanks for all the help and keep up the great work.

Joseph L

Learn To Trade
4.0
2014-08-20T10:36:37-04:00

Joseph L

The past options and forex tutorials taught by George were very helpful. I find these tutorials invaluable for a busy person like myself. I was able to keep myself up to date and on track ready to continue the learning process. Thanks for all the help and keep up the great work.

Harley S

The course is amazing. Where were you 30 years ago?

Harley S

Learn To Trade
5.0
2014-08-20T10:37:39-04:00

Harley S

The course is amazing. Where were you 30 years ago?

Partick M

I learned the basics I needed to trade successfully.

Partick M

Learn To Trade
4.0
2014-08-20T10:38:34-04:00

Partick M

I learned the basics I needed to trade successfully.

Iouri G

I like making money. I’m very happy, so far so good

Iouri G

Learn To Trade
4.0
2014-08-20T10:39:27-04:00

Iouri G

I like making money. I’m very happy, so far so good

Akos B

I learned things it would have taken me years to figure out

Akos B

Learn To Trade
5.0
2014-08-20T10:40:05-04:00

Akos B

I learned things it would have taken me years to figure out

Robert B

There is always someone ready to answer my questions.

Robert B

Learn To Trade
4.0
2014-08-20T10:40:59-04:00

Robert B

There is always someone ready to answer my questions.

Uldus V

I was impressed with the course’s professionalism and enthusiasm.

Uldus V

Learn To Trade
5.0
2014-08-20T10:41:40-04:00

Uldus V

I was impressed with the course’s professionalism and enthusiasm.

Dean K

I wish I knew about trading as a business years ago!

Dean K

Learn To Trade
4.0
2014-08-20T10:42:24-04:00

Dean K

I wish I knew about trading as a business years ago!

Peter P

Learn to Trade provided me with strategy, self-confidence and discipline

Peter P

Learn To Trade
4.0
2014-08-20T10:42:57-04:00

Peter P

Learn to Trade provided me with strategy, self-confidence and discipline

Shelley P

I took your course in 2008 and loved it. Since then I have been using what I learned at Learn-to-Trade to nicely supplement my pension income. Wanting a carefree type of trading, I have for the most part just sold options and made a monthly income which is a nice addition to my pension. I know I never would have made this kind of trading income without Learn-to-Trade. Thank you!

Shelley P

Learn To Trade
5.0
2014-08-20T10:34:39-04:00

Shelley P

I took your course in 2008 and loved it. Since then I have been using what I learned at Learn-to-Trade to nicely supplement my pension income. Wanting a carefree type of trading, I have for the most part just sold options and made a monthly income which is a nice addition to my pension. I know I never would have made this kind of trading income without Learn-to-Trade. Thank you!

Amir

Hi George,

I just wanted to thank you again for the amazing work on the tutorials especially Options trading.   Prior to joining, I had underestimated the quality of the trainings but they certainly far exceeded my expectations. Only I wish I’d found you 5-10 years ago!

Amir

Learn To Trade
5.0
2016-10-07T08:56:52-04:00

Amir

Hi George, I just wanted to thank you again for the amazing work on the tutorials especially Options trading.   Prior to joining, I had underestimated the quality of the trainings but they certainly far exceeded my expectations. Only I wish I’d found you 5-10 years ago!

Linda S

It is so fun! It is like playing Chess for me. Readjusting my position/move as market reacts. He really enjoying it now (he said it is like going to candy store for him as there are so many options to pick for option strategy). He thinks he can make 100% return. We both really appreciate your program and your teaching! We would not able to trade in less than 2mths if it wasn't for your program!

Linda S

Learn To Trade
5.0
2019-09-04T14:23:05-04:00

Linda S

It is so fun! It is like playing Chess for me. Readjusting my position/move as market reacts. He really enjoying it now (he said it is like going to candy store for him as there are so many options to pick for option strategy). He thinks he can make 100% return. We both really appreciate your program and your teaching! We would not able to trade in less than 2mths if it wasn't for your program!
4.4
15