The U.S. economy has been slowly recovering, with recent data showing second quarter growth snapped back to 4% and more than 200,000 jobs are being added each month -- the first time job growth has exceeded 200,000 for 6 straight months since 1997. But David Levy, chairman of the Jerome Levy Forecasting Center, forecasts that the U.S. could be headed for a recession.
He tells Yahoo Finance there's a 65% probability that we will see a U.S. downturn some time in 2015.
This contrarian view stands in contrast to Fed estimates, for example, which have the U.S. growing at an annual pace of at least 3% for the rest of the year and all of 2015.
Levy thinks slow growth in other countries will drag down U.S. output.
"It's not just one or a few countries; it is much of the world," he contends, citing three specific regions that could be a catalyst for a U.S. downturn.
"There has been massive overinvestment in [emerging markets] ... they pursued export models long after they had outgrown them," he says. "Their economies are out of balance and their investment is starting to collapse." He calls it "a slow motion train wreck."
He says Europe has its own deep problems -- "their banking system is like Japan's in the 1990s, unable to function well because [they] didn't clean up the bad loans and recapitalize banks."
Third, is China, which he contends has had a greater ability to keep its expansion going, but is "struggling with all the imbalances created."
Has the U.S. ever tipped into recession because of another country? He says no, and in fact, that's a point he's been emphasizing because he believes this time is going to be different. One reason is that, according to Levy, the U.S. economy is exporting a larger share of GDP than ever before, which is "good" but "that makes us more vulnerable to the rest of the world."
Check out the video to see why he thinks recent signs of strength in the U.S. economy are going to fizzle out in the second half of the year.
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