Based on recent data, Bank of America has raised the chance of a recession to 1-in-3 in the next 12 months.
This means there is over a 30% chance of a recession in the next year.
The banks global economist Michelle Meyer has said that the “bright spot” of the economy is that initial jobless claims remain at low levels.
“Our official model has the probability of a recession over the next 12 months only pegged at about 20%, but our subjective call based on the slew of data and events leads us to believe it is closer to a 1-in-3 chance,” said Meyer in a note this past Friday.
Along with the economy slowing down and the concerns over the trade war with China, interest rates have fallen and the major stock averages have suffered.
Meyer said some economic indicators are “flashing yellow,” signaling a coming recession.
According to the economist, three of five economic indicators that track business cycles, auto sales, industrial production and aggregate hours worked, are now at levels reached right before previous recessions.