Economic Outlook
What the charts and data are telling us
Since the tariff announcements, the talk about a looming recession has become louder and louder. It seems everyone is now calling for a recession.
The calls for a recession have become such a consensus view that the recession expectations have actually risen to the 4th highest level in the past 20 years.
Now a trade war with this level of proposed tariffs will likely cause economic pain. A slow down in the U.S. economy is almost unavoidable. Tariffs create uncertainty and a number of headwinds are bound to sprout from this trade war.
There is another layer to this. What happens to small and medium sized businesses?Smaller companies don’t have the purchasing power to front run or buy inventory ahead of the tariffs. Smaller companies don’t have the money to ride out the storm and wait by pausing or slowing orders. Smaller companies don’t have the money like big corporation do to get exceptions to their products.
In times of uncertainty for smaller businesses, the first thing to go is usually jobs. Watch for the layoffs. If this uncertainty continues, it’s likely layoffs come and a recession follows.
Do the tariffs get negotiated down and the uncertainty go away? I think we all hope so. Everyone wants a deal done. In a matter of time, I do believe a resolution is found. But it hasn’t happened yet.
In the meantime, does a recession still occur? Has the damage already been done?
Let’s take a look at what the data and charts are telling us.