The U.S. economy is slowing down. Even the Organization for Economic Cooperation and Development (OECD) said U.S. growth is lagging and an economic slowdown shouldn’t be ruled out.
The OECD’s leading indicators are designed to anticipate economic changes whether the economy is expanding or slowing down. The OECD expects the U.S. economy to grow at an annual rate of 3.1%. On top of that, the Federal Reserve anticipates that the unemployment rate will fall to 5.2%. But keep in mind, these forecasts tend to be overly optimistic and are almost always revised lower. (Source: Federal Reserve, last accessed May 12, 2015.)
U.S. Economy Already Looking Fragile
The U.S. gross domestic product (GDP) hardly grew, at an annual rate of 0.2% in the first quarter of 2015.
The mainstream says that the U.S. economy is poised for stronger growth in 2015, and the first quarter was just a hiccup. Sadly, the reality is completely different. There is decreased demand for skilled workers and increased demand for unskilled labor. Consumption seems to be stalling and exports are getting hurt due to the strong U.S. dollar.
What’s Ahead for the U.S. Economy?
Judging by the record-high stock market, unemployment levels near pre-recession highs, lower oil prices, and recovering housing market, investors are increasingly optimistic. But I remain pessimistic.
When I look at the data, it doesn’t really show any traits of a growing economy. In fact, it tells me downward pressures are increasing. On top of this, there are growing economic pressures coming from outside the U.S. as well; all of which could help derail U.S. growth.
I will not be surprised if the U.S. economy enters a recession in late 2015 or early 2016. Time will tell more.