Breaking News Emails Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings. SUBSCRIBE March 25, 2019, 6:35 PM GMT By Martha C. White A key metric that historically has been a precursor to a recession emerged on Friday, reinforcing fears on Wall Street — although some experts think a recession could still be a year or more out. The yield curve inverts when the borrowing cost on short-term debt rises above the cost for long-term debt — an indication that investors expect lower growth in the future. All seven of the past recessions have been preceded by inversions of the yield curve. “It’s a dangerous and upsetting harbinger of the future of the economy,” said Dan North, chief economist at Euler Hermes North America. “Typically, when the yield curve inverts for even a short period of time, we enter a recession about a year later,” he said. The time frame varies, he added; it has taken … [Read more...] about Markets are flashing this warning of an impending recession — but when?
German industry went into a sudden and unexpected collapse in November. The data is so bad some economists think it might be wrong. Nonetheless, they agree that Germany may have been in a recession for the last two quarters of 2018. Germany is the largest economy in Europe and the fourth-largest on the planet. So this is bad. Germany may be in recession, economists said, after they trawled through an unexpectedly horrible set of industrial and manufacturing data published on Wednesday’s from the world’s fourth-largest economy. German industrial production fell by -1.9% in November. Year over year, production hit a low of -4.6% – the biggest trough since the 2008 crisis. Germany’s exports fell -0.4% month over month in November, the government reported today. Suddenly, Europe is faltering. Germany is the largest European economy and its leaders have an outsized influence on the rest of the EU and the European Central Bank. A recession in Germany … [Read more...] about ‘Bad and unexpected’: Germany probably just went into a recession
Trade storm doing harm to world economy – WBWASHINGTON, D.C.: Trade conflict between the world’s two largest economic powers already is inflicting collateral damage and threatens to do yet more harm to the global economy, the World Bank warned Tuesday. And the global slowdown is beginning as government and corporate debt rise, especially among the poorest countries, while mounting interest rates increase borrowing costs, the bank said in its semi-annual Global Economic Prospects report. The report was markedly more pessimistic than a year ago — when the outlook was for synchronized global growth — and peppered with exhortations to take “urgent,” “imperative” or “critical” action. “Risks are rising,” senior World Bank economist Ayhan Kose told AFP. “The global economy is going through a difficult period. Skies are darkening and we see the global economy slowing.” Growth of the world … [Read more...] about Trade storm doing harm to world economy – WB
By David Milliken LONDON (Reuters) - British productivity growth slowed to a two-year low during the three months to last September, official figures showed on Wednesday, reinforcing concerns about the underlying health of the economy ahead of Brexit. Weak productivity growth has bedevilled rich economies around the world since the global financial crisis, but the problem has been particularly acute in Britain. Most economists see it as the main reason wages have failed to rise materially despite the lowest unemployment rate in a generation. Britain's departure from the European Union is adding headwinds, with business investment falling as firms hold off while it remains unclear if they will retain tariff-free access to EU markets after March 29. Britain's overall economy has slowed since the 2016 Brexit referendum and appears to have lost more momentum in late 2018 as Prime Minister Theresa May struggled to get support in parliament for her plan for a smooth exit from the bloc. The … [Read more...] about Productivity setback adds to worries for UK economy
Towards the end of last year, there was some good news on productivity, that perennial bugbear for the UK economy. The Organisation for Economic Co-operation and Development (OECD), the club of rich countries that seeks to promote economic growth, published figures revealing that the productivity gap between Britain and other advanced economies, including the United States, Germany and France, was not as big as had been previously assumed.The average British worker, the OECD revealed, was only 8% less efficient than the average American worker, instead of being 16% less efficient.The average British worker was now only 11% less efficient than the average French worker, down from the previous 19%. And, compared with the typical German worker, the typical British worker was now only 14% less efficient rather than the previous 22%.All of which was very encouraging and particularly for the Treasury. Perhaps the UK's dreadful record on productivity - economic output per hour worked - … [Read more...] about Britain’s ‘productivity puzzle’ bugs economy