Recession signals intensified Wednesday in the United States and in some of the world’s leading economies, as the damage from acrimonious trade wars is becoming increasingly apparent on multiple continents.
The US stock market posted its worst loss of the year, after a reliable predictor of recessions flashed for the first time since the run-up to the 2008 financial crisis. The Dow Jones average fell 800 points, or about 3 percent, and has lost close to 7 percent over the past three weeks.
Two of the world’s largest economies, Germany and the United Kingdom, appear to be contracting even as the latter forges ahead with plans to leave the European Union. Growth also has slowed in China, which is in a bitter trade feud with the United States.
Whether the events presage an economic calamity or just an alarming spasm are unclear. But unlike during the Great Recession, global leaders are not working in unison to confront mounting problems and arrest the slowdown. Instead, they are increasingly at each other’s throats.
And President Trump has responded by claiming the economy is still thriving while dramatically ramping up his attacks on Federal Reserve chairman Jerome Powell, seeking to deflect blame.
Wednesday’s selloff was caused by an unusual development in the bond market, called an ‘‘inverted yield curve,’’ that often foreshadows a recession.
For the first time since the run-up to the Great Recession, the yields — or returns — on short-term US bonds briefly eclipsed those of long-term bonds. Normally, the government needs to pay out higher rates to attract investors for its long-term bonds. But with so many losing confidence in the near-term prospects of the economy and rushing to buy longer-term bonds, the Treasury now is paying more to attract buyers to its 2-year bond than its 10-year note.
This phenomenon, which suggests investor faith in the economy is faltering, has preceded every recession in the past 50 years.
‘‘The yield curves are all crying timber that a recession is almost a reality, and investors are tripping over themselves to get out of the way,’’ said Chris Rupkey, chief financial economist at MUFG Union Bank.
It’s the latest in a string of worrisome news about the US economy. The government is expected to spend roughly $1 trillion more than it brings in through revenue this year, adding to a ballooning deficit. Business investment has begun to contract — largely due to the uncertainty surrounding Trump’s trade war — and manufacturing hiring has receded. The big hiring and investment announcements that piled up at the beginning of the Trump administration have ceased, as have the announcements of bonuses and pay increases that came after a tax cut law was passed in 2017.
Several White House officials have become concerned that the economy is weakening faster than expected, but they are not working on proactive plans to try and change its course. The Treasury Department has had an exodus of senior advisers in recent months, and the White House just announced a replacement for its chairman of the Council of Economic Advisers.
Instead of rolling out new policies, Trump and his top aides have escalated their attacks on the Federal Reserve, trying to pin much of the country’s problems on what Trump alleges are elevated interest rates that are strangling growth.
In a series of Twitter posts on Wednesday, Trump appeared to try to calm investors while unloading vicious language aimed at Powell, whom he nominated in late 2017.
‘‘Our problem is with the Fed. Raised too much & too fast,” Trump wrote. “Now too slow to cut. . . . Spread is way too much as other countries say THANK YOU to clueless Jay Powell and the Federal Reserve.”
The Twitter posts reflected a growing anxiety within the White House about problems in the economy, which many advisers believe will determine whether the president wins reelection. A few hours earlier, Trump offered a contradictory assessment, saying the inverted yield curve was a good sign because there were ‘‘Tremendous amounts of money pouring into the United States. People want safety!’’
In the past, Democrats and Republicans in control of the White House have scrambled when there were signs of an economic downturn, worried about the political fallout. They met and often consulted with Congress about ways to protect the economy or advance some kind of economic stimulus, either through tax cuts or spending increases.
But the Trump administration has already cut taxes and boosted spending, and there appears to be little political appetite to do more of either this year or next. Complicating matters, a number of investors and foreign leaders have blamed Trump’s trade war for causing the contraction in business investment and forcing companies to pull back, an accusation that has caught White House advisers off guard.
The US economy has shown signs of weakening in recent months, but high levels of consumer spending have helped enormously. Still, the escalating trade war between Trump and Chinese leaders has stopped many businesses from investing. And there are signs that the large tariffs he has placed on many Chinese imports are costing US businesses and consumers billions of dollars.
Darkening skies overseas gave investors more to worry about. New data indicated Germany was slipping into recession with the country’s economy shrinking 0.1 percent between April and June.
Meanwhile, China reported more signs of a weakening economy, with factory output falling to a 17-year low and high unemployment. Besides the trade war with the United States, China is also grappling with massive protests in Hong Kong, a key financial center in Asia.