The U.S. Economy is in a Recession

First on CNN: Next spring the economy will sink into a 1990-style mild recession, Fitch says.

The U.S. economy is poised to enter a mild recession next spring – a new forecast from Fitch Ratings will be released Wednesday and could raise alarms across the business community.

The economy has been on a steady upswing for the past three years. But the economy is now slowing down, and the worst is yet to come, according to Fitch’s analysis.

The forecast calls for a sharp drop in consumer spending, as the job market slows and consumers wait for paychecks to come through. Businesses are also starting to feel the effects of the slowdown in growth.

Fitch Ratings predicts that consumer spending will be 7.4 percent lower in 2018 than in the first quarter, and that this will lead to a 3.5 percent drop in real GDP.

As a consequence, GDP growth will reach a five-year low of 1.4 percent in 2018.

This will slow down future growth, with annual gross domestic product growth forecast to reach 2.0 percent by 2021 – a sharp slowdown from the 2017 growth of 3.3 percent.

The worst is coming in the U.S.

The second half of the decade will be the worst period of economic growth since 1991, with the U.S. economy slipping into a severe recession – which would mean the end of the post World War II era of strong and sustained growth, says Fitch.

The economy will fall into its third recession in as many decades, since the 1930s.

The GDP estimate of 1.4 percent does not take into account the potential impact of trade frictions and policy uncertainty, which will further slow the recovery.

As such, GDP will likely grow closer to 2.4 percent by 2021, more than the current 2.3 percent forecast.

So what’s the bottom line? The economy is now in a recession.

If you take that into account, the picture is not a rosy one. And that is why Fitch has put out its forecast for the economy. It is a forecast, not a prediction of an exact number.

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