In the recent Bankrate’s Fourth-Quarter Economic Indicator survey, there’s a 35% chance that the US economy will enter a recession within the next year. This only means that experts are becoming more optimistic about the future of the state’s economy.
However, the same survey revealed that the unemployment rate is expected to rise and job growth would slow down. Considering this, there’s still a mixed economic outlook in the US.
When it comes to interest rates, 62% of economists were expecting a reduction over the course of next year; the majority of them forecasted that the Fed would make two or three cuts. This year, interest rates were cut three times; US central banks said that their interest policy remains appropriate if information about the economy would be consistent with their outlook. On the other hand, 38% of experts still believe that the Fed won’t make any rate moves next year.
The survey also revealed the top economic risks today — weak business investment and manufacturing, slow global growth, and irregular US-China trade policy. Next year, economists said that the risks would likely be related to geopolitics, Trump’s impeachment inquiry, and the 2020 presidential elections.
In regards to the job market, employers are expected to add an average of 119,541 jobs every month. This seems a lot but the number shifted down from 125,957 jobs. In addition, the unemployment rate is forecasted to go higher, with economists estimating that it would reach 3.93% over the next 12 months. In October, 3.6% of the population were already jobless according to the Department of Labor. Despite this, economists said that it’s too early to panic and some slowdowns were expected.
In conclusion, no one can tell where the US economy is headed — overall growth wasn’t certain but the odds of a recession were diminishing. Hence, it would be quite difficult to determine the next best step. But in order to be protected against financial burdens, saving remains a practical option. According to Bankrate’s Greg McBride, it’s never too early to start building one’s emergency savings.