After a decade of sustained growth, the global economy largely recovered from the Great Recession. A number of indicators, however, are raising concerns that a contraction may be coming soon.
Several of the world's biggest economies are showing signs of trouble, experts say. The world's two economic leaders — the U.S. and China — are each feeling the pain from an ongoing trade war that could drag on for months, if not years. Last week, the U.S. showed an “inverted yield curve,” a complex financial metric that has occurred before each American recession since the 1950s.
The economies in Germany, Brazil, Italy, Mexico and a number of other countries are also showing vulnerabilities, experts say. The uncertainty is exacerbated by fears of the potential financial fallout that could happen if the United Kingdom leaves the European Union in October without first reaching a deal on the terms of its departure.
In general, an economy is considered to be in recession when it posts two straight quarters of declining gross domestic product. Some governments use their own more nuanced measurements to formally declare that their country is experiencing a recession.
Pessimistic forecasters say all of these indicators point to an imminent global recession. Periods of expansion and contraction are normal in all economies, but some experts fear a potential cyclical downturn could be made significantly worse by tensions between the U.S. and China, by Brexit and lingering effects of the Great Recession.
Despite signals of a slowdown, some experts say there are also signs, such as the low unemployment rate, that the world economy is strong. “There is no recession is sight,” Trump administration economic adviser Larry Kudlow said.
Others argue even if negative signs show a recession is coming, there's no indication of when it will happen or how severe it might be.