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The US economy has a 32% chance of plunging into recession and suffering "total organ failure" in 12 months, according to Russell Investments. That's up from 20% three years ago.

The increased risk reflects the recent inversion of the 10-year and three-month US Treasury yield curves, which preceded a recession by an average of one year in the past five economic cycles.

If CEOs lose confidence due to concerns about the US-China trade war, the US-Iran dispute, slowing global growth, and other issues, they may invest and hire less, eating into consumer income and spending and sparking a recession.

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The US economy has a 1-in-3 chance of plunging into recession and suffering "total organ failure" in a year's time, according to Russell Investments.

There's a 32% chance of a US recession in 12 months, up from 20% three years ago, according to the asset manager's Business Cycle Index model. The probability of a contraction has now passed its warning threshold and should be taken seriously, the report said.

The higher risk of contraction reflects the recent inversion of the 10-year and three-month US Treasury yield curves, which preceded a recession by an average of one year in the past five economic cycles, said Kara Ng, a quantitative investment strategist at Russell Investments.

There have also been signs of "cracks in the labor market" after US nonfarm jobs increased by 75,000 in May, less than half the expected amount. If CEOs lose confidence due to concerns about the US-China trade war, the US-Iran dispute, slowing global growth, and other issues, they may invest and hire less, eating into consumer income and spending and sparking a recession.

"In the past few months, we've observed slower global growth, lower CEO confidence, and lower capital expenditure," Ng wrote. "If the labor market fails, this may be a path to total organ failure."

However, the risk of recession has not yet reached pre-financial crisis levels, the report said. America's economic expansion could continue if the Federal Reserve cuts interest rates twice and the macroeconomic backdrop doesn't worsen, it added.

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