Recession Expectations Decrease as Trade Tensions Subside
- Consumer pessimism eases amid cooling in US-China tariff war
- Goldman Sachs trimmed the probability of a recession to 35% from 45%
- Consumer confidence rose among all age and income groups, and across political affiliations
- Expectations for average inflation fell to 6.5% from 7% in April
- President Trump withdrew a threat of 50% tariffs on goods from the European Union
- 44% of respondents expect stock prices to increase during the next 12 months
- Factory orders sank 6.3% in April after rising nearly 8% the prior month
The share of consumers expecting a recession over the next 12 months fell in May, according to the Conference Board. This aligns with a reduction in the odds of a downturn among economists, such as Goldman Sachs, which trimmed the probability of a recession from 45% to 35%. Consumer confidence increased across all age and income groups and political affiliations, with the largest gains among Republicans. Expectations for average inflation during the next 12 months fell to 6.5% from 7% in April. President Trump withdrew a threat of 50% tariffs on goods from the European Union, giving them until July 9 to negotiate a trade agreement. Forty-four percent of respondents expect stock prices to increase during the next 12 months. Factory orders dropped 6.3% in April after rising nearly 8% the prior month as companies bought goods before import levies pushed up prices.
Factuality Level: 7
Factuality Justification: The article provides accurate and objective information about consumer confidence, inflation expectations, and trade-related concerns. It cites sources such as the Conference Board and Goldman Sachs for its data and includes expert opinions from economists. However, it could be more concise in some parts and avoid speculation on future events.
Noise Level: 4
Noise Justification: The article provides relevant information about consumer confidence and its relation to trade tensions and tariffs. It also includes insights from economists on potential inflation and economic growth. However, it could benefit from more in-depth analysis of the long-term consequences of these factors and their impact on various sectors.
Financial Relevance: Yes
Financial Markets Impacted: Yes
Financial Rating Justification: The article discusses changes in consumer expectations for recession and inflation due to trade tensions between countries, which can impact financial markets and companies. It also mentions tariffs on goods from trade partners affecting import prices and factory orders.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text and it doesn’t meet the criteria of an extreme event happening within the last 48 hours.
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