The economic storm clouds are building regarding the status of the U.S. economy. Globally, China is in a massive economic slowdown along with the Euro sector. The two conflicts are placing serious doubt on the future of geopolitics as they appear to be creating division within the global economy. The convergence of situations and events are analogous to a derecho forming in the upper Midwest that will wreak havoc on agricultural interests over a geographical distance. Let's examine some of the headwinds that are on the U.S. economic watchlist.

Student debt

One hundred billion dollars of student debt that will need to be repaid will place pressure on consumer confidence, specifically for millennials. The ability to purchase a home, buy a car, and meet everyday expenses will become more difficult, reducing economic growth by as much as three-tenths of one percent by some estimates.

Labor strikes

Labor strikes in many sectors such as the automobile industry, Hollywood, and now transportation in Canada is impacting manufacturing and the movement of goods and services. Will the labor force price their organizations and institutions out of being globally competitive?

Budget impasses

Whether it is the federal budget or negotiations on the Farm Bill, the impasses are impacting the confidence of the American consumer and the ability of businesses to make long-term investments. With the presidential election one year out, this will only be magnified by the general media, social media, and now artificial intelligence (AI). It will become increasingly difficult to determine what is fact versus what is fabricated.

The erosion of governance

The erosion of governance and the ability to compromise for the common good is becoming much more difficult. In discussions after speaking events, many individuals have suggested a new category on the election ballot: none of the above! I chuckle and agree, to some extent. Again, without effective leadership, the ability to make both short and long-term decisions becomes much more difficult.

In the next article, we will continue our discussion of the headwind variables and a possible economic derecho.

P.S.

On a positive note, since the 1980s, economic expansions have been longer, nearly 90 months compared to 58 months on average since the Great Depression. Economic recessions since the 1980s have been shortened to just over six months compared to an 11-month average since the Great Depression.

The opinions of David Kohl are not necessarily those of cornsoybeandigest.com or Farm Progress.