U.S. Outlook: Trade fears mount
More signs emerged this week that the Goldilocks view of the U.S. economic outlook could be in for a serious challenge in the weeks ahead.
President Trump’s announcement of tariffs on all steel and aluminum imports roiled global financial markets yesterday and again today.
For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on March 2.Key observations:
- Trump fanned the flames by tweeting, “Trade wars are good and easy to win.” I believe trade retaliation is likely.
- If the stock market was looking for a reason to sell off, this could be the trigger, especially if the U.S. action touches off a serious global trade war.
- We lower our estimate of Q1 GDP to 1.8%, down from a downwardly revised 2.5% GDP growth in the fourth quarter.
- On the bright side, U.S. initial jobless claims fell to the lowest levels since 1969 last week, bolstering our forecast for February job creation to 215K.