U.S. Recession Risk, European Bad News, U.K. Slowdown: Eco Day

(Bloomberg) -- Good morning Americas. Here’s the latest news and analysis from Bloomberg Economics to help get your Friday started:

• Economists put the risk of a U.S. recession at the highest in more than six years amid mounting dangers from financial markets, a trade war with China and the federal-government shutdown.
  • Meanwhile, Federal Reserve officials say the U.S. central bank can be patient before adjusting interest rates again as it waits to see how global risks impact the domestic economy; and Jerome Powell is still waiting for that White House invite.
• U.S. inflation data is due today, with the closely-watched core measure, which strips out volatile food and energy costs, expected to hold at 2.2 percent for a second month.
• Europe’s economy can’t seem to catch a break, with Italy adding to the bad news just days after a recession warning was slapped on Germany, the region’s biggest economy.
  • Against that backdrop, the European Central Bank should wait until the spring before tweaking its policy and keep all options open amid economic weakness and a fragile international outlook, according to Governing Council member Francois Villeroy de Galhau.
• A report Friday showed the U.K. economy continued to lose momentum in the three months through November as manufacturing slumped. The Bloomberg Brexit Barometer for December, also released today, fell in December to the lowest level since the country voted to leave the European Union in 2016.
• Japan will review the handling of its economic statistics and budget for the coming fiscal year after incomplete wage data saw it shortchange 20 million welfare recipients by around $525 million.
• Less than a month before India’s budget, risks are growing that Prime Minister Narendra Modi’s government will miss fiscal targets for a second year in a row as it bows to populist pressures before a high-stakes election.
• Australia’s construction activity has slowed to the weakest in five-and-a-half years as tighter lending conditions and falling prices weigh on the nation’s housing market
• Finally, here’s our wrap of what happened this week and a preview of the key global economy events coming up.

To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Zoe Schneeweiss

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