Tariffs and Trade Could Stall Economy

Through the first five months of 2019, the U.S. economy shook off Federal Reserve rate hikes and a government shutdown, defying prognostications for recession. In fact, it behaved more like an economy in the early stages of a recovery, posting first-quarter growth of 3.1 percent gross domestic product, averaging 200,000 in monthly job increases, and posting healthy corporate earnings across various industries. Small business optimism, according to the National Federation of Independent Business, also rebounded to 105 in May from a brief lull of 101.2 in January, following the government shutdown and a fourth Fed rate hike in December 2018. I originally characterized the U.S. economy heading into summer 2019 as having “vroom” – but then came the tariff boomerang. It resurfaced as a top risk – one that wasn’t just 10 percent tariffs on China, but now 25 percent on China and potential penalties on Mexico. Combined, the two tariff issues are tough to shake off. Click to read more at www.ccim.com.