"The concept of stall speed is a contentious one, but one that we tend to believe does influence economic outcomes," Parikh said. Sales growth can slow only so far before it "sets in motion an aggregation of cost cutting, labor shedding and inventory reductions that constitute a typical recession."
With Parikh warning 'the probability of more widespread recessions has increased," Pimco, manager of the world's largest bond fund, last week forecast global growth will slow to between 1.5 percent and 2 percent next year from 2.2 percent in 2012.
In the U.S., payrolls rose less than projected in August, and manufacturing shrank for a third month in the longest decline since the 18-month recession ended in 2009. Euro-area services and manufacturing also contracted for a seventh month in August, and the unemployment rate is a record 11.3 percent.
Shared Pain
While emerging markets powered the world through the last recession, many now are sharing the pain. Chinese industrial output rose at the slowest pace in three years last month, underscoring the risk that full-year economic expansion will be the lowest in more than two decades.
JPMorgan Chase & Co.'s international all-industry purchasing-managers' index is close to June's three-year low of 50.1, implying expansion of about 1.5 percent worldwide, and its new gauge based on incoming data suggests 2 percent. Korean exports -- a barometer of demand because they reflect the health of key trading partners such as China -- fell 6.2 percent in August from a year earlier.
Corporate bellwethers also express discomfort. FedEx Corp., the world's largest cargo airline, today reduced its profit outlook for the year through May after quarterly earnings dropped for the first time in almost three years amid lower demand for premium shipping services.
Constrained Revenue
"Weakness in the global economy constrained revenue growth at FedEx Express during our first quarter and affected our earnings," Memphis, Tennessee-based Chief Executive Officer Fred Smith said in a statement.
New research published this month by Nathan Sheets, global head of international economics at Citigroup in New York, shows just how fast recessions can materialize. When U.S. growth slid below 1.5 percent in the past, expansion typically dropped 3 percentage points in subsequent quarters, and growth elsewhere mapped up to 30 percent of the U.S. decline, he found.
What matters now is whether the risks turn into reality. Morgan Stanley's Fels -- who last week cut his forecast for growth for a third straight month to 3.1 percent this year from March's 3.7 percent estimate and to 3.3 percent in 2013 from 4 percent -- identifies two key threats.
Fiscal Cliff
One is rife policy upheaval. No matter who wins the U.S. presidential election in November -- Democratic President Barack Obama or Republican challenger Mitt Romney -- the fiscal cliff is looming. Japan may hold early elections, and China's leadership is changing.