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The threat of a recession in 2020 has hovered like a dark cloud most of this year.

While the cloud still lingers, it has less become less ominous and may be receding further into the future.

The forces that threatened to topple the economy, such as the U.S. trade war with China, have become less menacing the past couple of months while three Federal Reserve interest rate cuts have made borrowing cheaper and provided a dose of steroids to the aging economic expansion.

As a result, that record-long growth will keep plugging along, but at a slower pace, as lingering jitters from the trade fight and weaker economies in other countries leave Americans on edge, and less willing to spend.

“Were stabilizing at a kind of modest growth – uninspiring but steady,” says Barclays economist Jonathan Millar.

Besides the prospect of a trade truce with China, other developments have reduced the risk of a recession. The chances that Britain will leave the European Union without a trade deal with the continent have ebbed. And 10-year Treasury yields climbed back above three-month rates in October. That relationship had reversed in March, a yield curve “inversion” that traditionally heralds a bleak outlook.

Forecasters surveyed in November by the National Association of Business Economics put the odds of recession next year at 47%, down from 60% in the spring. Economists polled this month by Wolters Kluwer Blue Chip Economic Indicators figure there’s a 33.1% chance of a downturn in 2020, down from 38.4% in June.

The November employment report, released early this month, bolstered confidence in the economy, which added a booming 266,000 jobs, far more than expected. Monthly payroll gains are averaging 180,000 this year, above the 150,000 to 160,000 many analysts predicted.

“We now see the risks as being more balanced,” Millar says, with the job figures “highlighting the possibility that household spending may be carrying more momentum into next year.”

Whether the U.S. dodges a recession in 2020 could be pivotal in determining whether President Donald Trump wins reelection next November. Economic slumps helped doom bids for second terms by presidents such as Jimmy Carter and George H.W. Bush, notes Diane Swonk, chief economist of Grant Thornton.

Yet this slow-speed recovery from the Great Recession of 2007-09 has been nothing if not a Rorschach test, providing fodder for both bulls and bears.

Although most analysts expect the economy to ease into a low simmer next year, some expect it to grab a second wind. Others forecast a more dramatic slowdown that leaves recession risks elevated.

Here’s a look at the three possible outcomes:

Prevailing view: slower growth

The 51 economists surveyed by Wolters Kluwer Blue Chip reckon the economy will grow a modest 1.8% in 2020, according to their average estimate, down from 2.3% this year and a healthy 2.9% in 2018 that matched a post-recession high. The Trump-led federal tax cuts and spending increases that juiced growth last year have faded, Millar says.

Meanwhile, U.S. and Chinese officials reached a tentative phase 1 deal on Thursday, according to reports. The agreement was expected to cancel tariffs on $156 billion in mostly consumer-related Chinese imports that were set to take effect December 15.

That would leave duties on $360 billion in shipments from China, though the size of the tariffs could be cut as part of the deal, according to the reports.

Millar says a partial agreement would tamp down the risk of recession but leave a fog of uncertainty that, along with sluggish growth abroad, takes a growing toll on American manufacturing and business investment. The presidential race is also generating a lack of clarity on tax and other policies that will dampen business spending, says RSM economist Joe Brusuelas.

“We’re in for a year of uncertainty,” says Gregory Daco of Oxford Economics.

The economists surveyed by Wolters Kluwer expect business investment to increase just 1.1% next year, half the pace of 2019, while industrial production growth slows. Manufacturing activity has contracted four straight months, according to the Institute for Supply Management. Millar believes recent signs of a factory pick-up in Europe and China should signify that U.S. production will soon turn up but at a low level.

So far, consumers have largely been insulated from business’s woes, with consumption slowing but remaining on solid footing. Household debt as a share of income is low and savings are relatively high. That’s key because household spending makes up about 70% of economic activity. Yet Daco believes weak business sentiment will increasingly chill hiring – and thus consumer confidence and outlays – as corporate profits remain subdued and wage growth edges lower.

Another factor likely to hinder household purchases is a pullback in job growth. Millar figures average monthly payroll gains will slow sharply to 100,000 to 125,000 next year, because of both the weakening economy and unemployment that’s at a half-century low at 3.5% and spells fewer available workers.

The economists polled foresee unemployment rising to an average of 3.7% next year as job growth slows. And they predict consumer spending will increase 2.3%, down from 2.6% in 2019.

Housing, meanwhile, should be a bright spot now that 30-year fixed mortgage rates have fallen to 3.68% from 4.5% early in the year, in part because of the Fed rate cuts.

Yet Daco expects housing construction to increase a modest 0.9% next year, noting that it will continue to be constrained by limited inventories and shortages of workers and available lots.

Optimists: Consumers will overcome

Other economists have a more favorable view. Sure, manufacturing has struggled but that’s partly because of some temporary factors, such as the General Motors strike, says economist Joe LaVorgna of research firm Natixis. And manufacturing is invariably cyclical, he says, with pullbacks followed by rebounds.

Companies, in fact, have been drawing down the stockpiles of goods they built up early this year in anticipation of tariffs on Chinese imports. Goldman Sachs says the drop-off in production stemming from the swollen inventories “is probably nearing in an end.”

If the economy is growing about 2% with manufacturing shrinking, imagine how much better it can do when factories spring back to life, LaVorgna says.

More broadly, Goldman says economists are placing too much emphasis on manufacturing, which makes up about 12% of the economy, and not enough on low-interest rates and a stock market that’s not far off its record high reached in late November.

“We expect the strength in consumer spending to outlast the weakness in business investment,” Goldman wrote in a note to clients.

Rather than taking a bigger toll on the economy next year, the research firm expects the trade war’s impact to fade “absent further escalation.” And as unemployment falls to 3.3%, Goldman says, yearly wage growth should accelerate to 3.5%, fueling more spending.

Both LaVorgna and Goldman expect the economy to pick up steam and grow about 2.5% next year.

What about that looming recession?

Goldman puts the odds at just 20%. Traditionally, low unemployment led to faster wage growth, sparking higher inflation and Fed rate hikes, both of which nudged the economy into a tailspin, Goldman says. But inflation has been stuck below the Fed’s 2% annual target for various reasons, including discounted online shopping and expectations by companies and workers that inflation will stay low.

There’s also little sign of any bubbles, such as run-ups in tech stocks in the late 1990s and home prices in the mid-2000s, that derailed those expansions, Goldman says.

Pessimists: Uncertainty spreads

Some analysts believe the mainstream view understates the damage the trade war and sluggish global growth will inflict on consumer spending and the service sector.

“The uncertainty from manufacturing is going to likely spread,” says Scott Anderson, chief economist of Bank of the West.

Anderson already sees signs. Although consumer confidence is still solid, it has declined four straight months, according to the Conference Board. And since July, the share of Americans planning to buy homes, cars and appliances the next six months has declined.

“The consumer is looking a little tired,” Anderson says.

Further tempering consumption next year, he says, is a stock market that “has gotten too frothy.” Some analysts expect only modest gains after the Standard & Poor’s 500 index has shot up 25% this year.

Anderson projects the economy will grow just 1.3% next year. He sees a 40% chance of recession.

Fearing Trump could ratchet up the trade fight with China if a larger deal remains elusive, Swonk puts the odds of a downturn at 51%.

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