Financial markets are tumbling despite the U. S. economy continuing to perform well — here's why
Hiring in the U. S. remains solid, employee pay is rising, holiday spending looks merry and bright, and companies across the land continue to mint money. On Wall Street, though, stocks tumbled to a third straight weekly decline, with the Dow closing down nearly 560 points on Friday and other indexes also nosing down sharply. What gives?
Investors focus on the future, not the past, and what many see around the bend is a slowing U. S. and global economy. Domestic growth boomed between April and October, averaging a robust 3.8 percent. But forecasters say growth is sliding in the fourth quarter, to somewhere just north of 2 percent.
That doesn’t mean Americans should batten down the hatches — economists still think the odds of a recession next year are low. Indeed, the economy could well defy expectations and gain speed in 2019, propelled by lower oil prices and strong consumer spending. For now, however, investors are banking on the U. S. economy gearing down a notch or two.
So why, exactly, might the economy be cooling? Start with the so-called fiscal stimulus that’s been plumping growth this year.
