Entrepreneurs tend to be optimistic by nature. As the year 2018 ends and 2019 begins, there is ample reason for many entrepreneurs to feel good about the future.
The latest signs of an improving economy were strong enough to help persuade the Federal Reserve to raise interest rates recently—for the first time in nearly a decade. A boom in the valuation of technology-based companies, private as well as public, drove expansive optimism in that sector, only to be curtailed over the last three months by political issues, reduced demand for social media services, and the trade wars.
But storm warnings are already on the horizon with the Chinese stock market down 30% in 2018 and the U.S. stock market off nearly 3,000 points from the 2019 high. Are these early warning signals of an economic downturn?
A recent survey conducted by Duke University concluded that a recession in 2019 was looking “likely.” Nearly half of the executives surveyed believe that the United States will enter a recession by the end of next year, and 82% expect that a recession will happen by the end of 2020.
But how can a recession happen when our economy is experiencing record GDP increases and we have full employment?
Interestingly, a full employment economy can contribute to the likelihood of a recession. Businesses that are labor constrained cannot grow as rapidly, and they encounter a