U.S. recession indicators are growing stronger and there's one bigger-than-usual reason why the world should be worried: China isn't coming to the rescue this time.
Last week alone, a gauge of U.S. manufacturing unexpectedly fell to its weakest reading in a decade and payrolls at private companies grew less than forecast. Economists are starting to wonder whether the United States has approached so-called stall speed, the slowest pace of growth without careening into a recession. The International Monetary Fund, meanwhile, will likely downgrade global growth estimates this month.
One of the engines that drove a global economic recovery after the last two downdrafts in America — the relatively shallow one in 2001 and the catastrophe that began in 2007 — was China. As the financial crisis escalated, Beijing opened a floodgate of credit and cut interest rates, which stoked demand for everything from Australian coal to German cars.