An escalating trade war with China, a dramatic drop in the stock market and other economic indicators have raised fears that another economic recession may be on the horizon.

Another downturn 11 years removed from the Great Recession could have a deep repercussions for Alabamians’ finances– from job losses and an inability to pay medical bills to mortgage and car loan defaults.

Talk of a potential recession hit a fever pitch this week after the Dow Jones had its worst performance of the year on Wednesday, when it dropped 800 points, or 3 percent of its value. Global stock markets have also experienced a slide.

The U.S. bond market has also experienced a trend that portends a bumpy road ahead: short-term bond yields are greater than long-term bond yields.

“Longer-term rates below shorter term rates are a clear signal from bond investors that they think the United States economy is on the downswing — that its future looks worse than its present,” New York Times senior economic correspondent Neil Irwin reported Thursday.

“The countdown to a recession has just started,” Hussein Sayed, chief market strategist at online forex broker FXTM, told the Associated Press.

But Alabama officials haven’t flipped over their hourglasses just yet.

State Finance Director Kelly Butler said economic trends monitored by state government are strong: individual income tax revenues, which are the biggest source of state money for public schools, are up 6.4 percent through July as compared to last fiscal year. Sales taxes are up 4 percent.

“There’s just nothing in the numbers yet that suggest that we’re close to entering a recession,” Butler said.

She said concerns about the stock market and bond market are fueling some speculation nationally about a recession but there’s not wide agreement among economists.

“There’s not a consensus that a recession is a high likelihood, let’s just say in the next six to 12 months,” Butler said. “Beyond that, it gets more dicey and more speculative.”

Amid the concern, AL.com is asking readers for their biggest worries about how an economic recession may impact them. To participate, fill out the form below. We’ll get back to you with the answers.


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