We are in May and, by most measures, the country is back on an equal footing. So why did the black cloud go so fast?
Economic observers are increasingly wondering whether uncertainty and pessimism – which are repeated in a number of regularly published surveys and tend to be grouped together under the term "sentiment" – could fuel economic performance more than before. .
On Wednesday, the chairman of the Richmond Federal Reserve, Tom Barkin, delivered a speech that advanced this theory, highlighting the shock to business confidence provoked earlier this year by factors such as government shutdown and a trade war who was hatching. The risk: consumers could delay big purchases and companies could cancel their plans to expand, creating a spiral that the economy could not correct itself.
"We could talk to us about a recession," Barkin said. "Some economists have studied the spread of information from the point of view of the disease, where the information spreads slowly at the beginning, but is quickly gaining speed." I would say that in the current media climate, the "disease" spreads faster. "
The economic nervousness of the end of 2018 has not caused a slowdown this time, partly thanks to the help given by the passage of the Federal Reserve to be patient to raise the rates of interest. 39; interest. But Barkin fears that low expectations will become a self-fulfilling prophecy down the line.
According to Barkin, the economy is more subject to variations of opinion, because businesses and consumers are nervous after a recovery that will soon become the longest of all time, and smartphones allow everyone to absorb every economic news several times a day.
Greg Daco, chief US economist at Oxford Economics, and Tim Duy, professor of economics at the University of Oregon, also warned of a "recession bias" among stock analysts , which could tip the US economy into a negative fall even when fundamentals are creating jobs and wage growth remain fundamentally sound.
