Economists' consensus going into this year was the economy would grow about 3 percent, after an expansion of 2.4 percent last year.
Given the weakness of some recent data, several economists have reduced their forecast below 2 percent. But Raoul Pal, editor of The Global Macro Investor newsletter, goes a step further than that. "There's a probability that the U.S. goes into recession this year alone," he tells
CNBC.
And what's going to cause the downturn? Oil's plunge and the dollar's ascent, Pal explains.
Oil prices have dropped 56 percent since late June, hitting 5 ½-year lows in January. And the dollar has touched multi-year highs against a range of currencies in recent weeks. It touched a 12-year peak against the euro and a seven-year zenith against the yen this week.
The Dollar Index, which measures the greenback against six other major currencies, could soar another 25 percent before the move ends, judging by past bull markets for the greenback, Pal said.
A strong dollar reduces inflation and hurts corporate earnings. In addition, falling oil prices are beginning to devastate the energy sector.
"I'm expecting much more deflation than people are imagining right now. . . . Everybody is going to feel this huge bout of deflation."
Pal's not the only one pessimistic on the economy.
Gallup's U.S. Economic Confidence Index was -3 for the week ended March 8, the third consecutive negative reading after an eight-week streak of positive scores. To be sure, the index is still well above most of its levels since 2008.
The index averages Americans' assessment of current economic conditions and their view as to whether the economy is improving or getting worse.
For the week ended March 8, 26 percent of the 3,556 adults polled said the economy was "excellent" or "good," while 27 percent said it was "poor." This resulted in a current conditions score of -1, basically unchanged from the -2 registered during the two weeks prior.
So what accounts for the recent weak performance?
"The recent slip back into negative territory is likely related to a reversal of the trend in gas prices, after spending on fuel reached a long-term low at the end of January," writes Gallup's Justin McCarthy.
Meanwhile, "the government's generally positive unemployment report for February does not seem to have moved Americans' economic confidence in a positive direction," McCarthy writes.
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