These predictions are not surprising. The U.S. economy has on average been in recession in one out of six years since 1945 (pimco), so the current upswing, which started in 2009, will be 11 years old in 2020. " The risk of recession is growing as the expansion ages", claims JP Morgan (jpmorgan).
But I believe that the recession callers are too pessimistic. Recessions happen usually unexpected and random, they cannot be predicted, otherwise they could be easily avoided. I think the wide spread pessimism will even reduce the probability of a recession - becoming a self-destructing prophecy. Imagine the leading German car association ADAC predicts that next Sunday the Autobahn 8 (highway) between München and Stuttgart will be clocked because of too much traffic and there will be lots of accidents. What will happen? Many driver will avoid this Autobahn and the predicted traffic jams won`t happen.
Most economists call Trump´s trade war against China as a possible cause. I agree that the massive tariffs - and the Chinese retaliations - will do a lot damage to the US economy. US consumers will have to live with much higher prices for many goods, less variety and a lower quality (because the US producer will have to face less competition and are less inclined to produce high quality). The trade war will certainly slow down economic growth in the US - now about 4% - but I doubt that it causes a full fledged recession with more than one quarter shrinking GDP, imploding consumer spending & a return of the job less rate to 10% and more. The US companies are very efficient (earnings are growing this year about 20%) and lower taxes and reduced regulations will compensate most of the negative impacts.
Many economists also believe that the Federal Reserve Bank could kill the economic expansion. The Fed already hiked her interest rates 8-times and announced more hikes. But history shows that stock prices & interest rates can happily rise together: The Bank of America Merrill Lynch (finance) notices that “the 1950s was a period of higher stock prices and higher US interest rates. The US 10-year yield bottomed near 1.5% in late 1945 and the S&P 500 remained firmly within its secular bull market until yields moved to 5-6% in the mid 1960s. The S&P 500 rallied 460% over this period.” Recessions are only caused when the Fed responds too late to rising inflation rates. In these cases they had to fight harder to break the inflation mentality, meaning sharp interest rate hikes. But I assume that the necessary interest rate hikes will be moderate because inflation will be constraint, thanks to the early response of the Fed , who hiked eight times already and the technological progress - including Internet & automation - that keeps prices at bay.
Economists also point on the oil price rally. Since 2016 the price of oil almost tripled and Iran sanctions, conflict with Saudi Arabia and other political issues could drive the oil price even higher. Nine out of ten of the U.S. recessions since World War II were preceded by a spike up in oil prices, writes Prof. James D. Hamilton, University of California, San Diego ( pdf econweb). Another study by Prof. Hamilton shows that the oil price shock from 2008 - from summer 2007 through July 2008 the oil price spiraled from about $50 to $147 - turned the economic slowdown into a severe recession (econbrowser).: "The oil price increase over 2007:H2-2008:H1 should be regarded as a key development that turned the slowdown in growth into a recession" (archives).
But I believe that the risk of an oil induced recession is low. In 2014 oil prices hovered around $120 without causing a recession. So the oil price (today about $80) would have to climb more than 50% before reaching the danger zone for the US economy. Fortunately the US oil production is rising - thanks to fracking. Higher oil prices make more oil wells profitable - and also more offshore drilling - which could lead to an over-supply of oil and the oil bubble may pop again - as it did in 2014.
Economists also say that a wave of retirement among workers of the Baby Boomer generation and a dwindling productivity could cause a new recession (investopedia). I think this fears are overblown as well because the US economy is getting more efficient. During the recessions of the years 2001/02 and in 2008 companies restructured and reduced costs significantly in order to survive. Now they are much fitter and more efficient than before.And we are experiencing a new industrial revolution. Advances in Internet, mobile computing, 3-d-printing, robotics, nano- & biotechnology and other technologies are diminishing the recession risks because they are reducing costs, raising efficiency and creating new markets.
Some claim that recessions are a force of nature and have to come frequently. But they are wrong. This summer Australia’s economy entered its 27th year without a recession (reuters ). The Australians broke a record, which was hold by Netherlands, which didn`t have a recession between 1982 and 2008. JP Morgan mentions that "the economy has been getting more stable over time. This can be seen in the diminished quarter-to-quarter volatility in real GDP, and our research suggests that better inventory management, a more stable housing sector and the growth of the more stable services sectors have all contributed to this trend" (jpmorgan).
I assume that a recession in 2020 is possible - as in any year - but it won´t be caused by the above mentioned factors and has a low possibility. It is possible that the US follows the example of Australia and will stay recession-free for many more years.
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