Economists are not particularly troubled by that softening. They see it as a natural signal that the economy will grow more gradually this year. But investors have to weigh that interpretation — that the economy is simply drifting toward less exciting times — against the possibility that it is reeling toward calamity. It hasn’t helped the mood of investors (or President Trump) that the Federal Reserve decided to raise its target lending rate four times in 2018.
‘A Banner Year’
For now, though, economists believe that fears of an imminent recession are overblown. The unemployment rate — 3.7 percent in November — hovers near a 50-year nadir. Job openings have hit record highs, and a growing number of workers are quitting, a sign of confidence in the hiring outlook.
Even wages, which for months only inched up, have begun to pick up more quickly. The recovery has gone on for so long that it has finally begun to lift the lowest-paid workers, who have seen the biggest gains, and African-Americans, whose jobless rate has reached record lows.
“2018 was a banner year for the labor market,” said Julia Pollak, a labor economist at the online employment market site ZipRecruiter. And while it’s hard to imagine the jobless rate dipping much lower, there are still Americans who either do not have jobs or are not clocking as many hours as they would like. The share of people who have part-time positions but would prefer to work full time is higher today than it was in 2007.
The Shadow of the Trade War
Global growth is slowing. The Trump administration is waging a trade war with China. And on Wednesday, Apple cut its revenue forecast for the first time in 16 years, citing flagging iPhone sales in China.
On Thursday, Kevin Hassett, the chairman of the White House Council of Economic Advisers, said on CNN that Apple would not be the only victim of tensions with Beijing.
“There are a heck of a lot of U.S. companies that have a lot of sales in China that are basically going to be watching their earnings be downgraded next year until we get a deal with China,” Mr. Hassett told the network.
Mr. Trump has indicated that he would like to reach a deal with Beijing, and the market turmoil, along with Apple’s announcement, may add to the pressure to end the dispute.