Economists See Recession More Likely Due to Trade War

The risk of a recession is rising, and the main threat to the economy is the Trump administration’s ongoing trade war, according to a panel of economists surveyed by the National Association for Business Economics released Monday.

A small majority of the Washington, D.C.-based association of business economists also expects that the Federal Reserve to remain on hold through 2019, with 40% of the group saying they expect at least one more rate cut this year.

The results of the survey, conducted the week of Sept. 9-16, come as many analysts see warning signs in the latest U.S. economic indicators, including a plunge in manufacturing activity to more than a 10-year low in September and a sharp slowdown in services industry growth to levels last seen in 2016. Those reports last week heightened fears the economy may be flirting with a recession, sending stock prices sharply lower.

Four out of five of the NABE economists surveyed said they think the economy is at risk of slowing further, up from the 60% who said so in June. In their latest survey, NABE panelists said they expect real gross domestic product will continue to expand at an average rate of 2.3% this year, but will slow to 1.8% in 2020. That’s weaker than the group’s last forecast in June.