Economic mood
Is the United States a Trump recession?
Many economists expect a weaker economy in the largest economy. US President Trump’s customs conflicts are a burden. It probably no longer excludes a recession.
Donald Trump’s election as US President fueled great expectations at the financial markets. Tax cuts and less bureaucracy should be used to grow the growth of the US economy. In the meantime the mood has turned. Above all, the aggressive customs policy of the new US government, but also the foreign policy conflicts. Trump’s latest statements are interpreted that the president no longer excludes a recession. Economists mostly expect a weaker economy of the largest economy in the world. The stress factors:
Customs policy in particular creates uncertainty. Trump is a big fan of tariffs. Economists, on the other hand, see almost only disadvantages for everyone involved. Trump has provided chaos in the past few months. Customs against Canada, Mexico and China were recently announced and partially withdrawn. It is expected that tariffs are also raised against the EU. Many goods that are imported from abroad cannot be produced immediately in the United States and would therefore automatically become more expensive as a result of tariffs. In addition, in view of the lower competition from abroad, US companies could also increase their prices.
The latest data on the mood in US companies date from February. A survey by the Institute for Supply Management, which is greatly observed in the financial markets, showed a slight decline in mood in industrial companies. The mood values for the order intake have been significantly fallen, while the companies expect higher prices at the same time.
Trump was also able to win the elections because many voters find inflation too high. As President, he tries to press inflation with the help of falling oil prices. Nevertheless, according to economists, an increase in inflation is threatened in the USA as a result of customs policy. According to surveys, consumers expect stronger inflation.
The US labor market has proven to be relatively robust in recent years. However, the latest data shows the first indications of cooling. The number of employees in February has increased less than expected, the unemployment rate increased something. At 4.1 percent it remains at a low level. The job structure is described by economists as disappointing.
More and more fear of the economy is spreading on the recently spoiled US exchanges. Trump’s erratic customs policy, but also the clearing in the state apparatus directed by his advisor Elon Musk, investors are increasingly afraid of negative effects on the economy. The result is unusually strong price losses on the US exchanges. Especially with tech shares on Nasdaq, there was a real sale.
In the course of US customs policy and growing concern for the American economy, the dollar has come under pressure since the beginning of March. At that time one euro had cost around $ 1.04. In the meantime, he was able to benefit from the weakness of the dollar and was last traded over $ 1.09. It should be important for the course of the course how the US Federal Reserve Fed reacts. Higher interest should tend to support the dollar. Trump is considered the opponent of high interest.
Impending closure of government agencies
The United States also threatens a closure of government agencies (“Shutdown”). If the congress does not agree, the US government will run out of money on Friday. “This would only put a strain on the US economy in itself, but would be a unfavorable time because of the already uncertainty,” the US experts from Commerzbank write.
dpa
Source: Stern
