Economic slowdown is like a disease and Morgan Stanley warns that the sickness will spread to economies around the world, and eventually lead to a global recession.

“The wheels for a slowdown are in motion,” Morgan Stanley chief economist Chetan Ahya wrote in a note Tuesday.

“Even as we have been revising our growth projections lower, we continue to highlight that the risks remain decidedly skewed to the downside. We expect that if trade tensions escalate further … we will enter into a global recession (i.e., global growth below 2.5%Y) in three quarters.”

A global recession could be triggered by tighter financial conditions. Ahya believes the risk of that happening is “high and rising,” according to CNBC.

America has been seemingly insulated from the global downturn with solid growth and record-low unemployment, but Ahya argues some slowdown is starting to show in American data. The economist points to payrolls data, which has suffered a “significant loss of momentum” in the past seven months. The six month moving average dropped from 234,000 in January to 141,000 in July.

And according to the Labor Department, the job market isn’t quite as strong as originally believed after revised figures show the economy had 501,000 fewer total jobs this March.

The Labor Department said Wednesday that nearly two-thirds of the downward revision came from the retail and leisure and hospitality sectors, the industries most associated with consumer spending, a leading economic indicator.

Manufacturing has become a recession concern as well. The IHS Markit Manufacturing Purchasing Managers’ Index is quite a mouthful, but it’s also been on the decline for the past couple months. The index hit 50.6 in June and then dropped again in July to 50.4, which is the lowest level the index has hit since September 2009, according to CNBC. Anything above 50 is regarded as expansion, while anything below 50 means contraction.

“Falling business spending at home and declining exports are the main drivers of the downturn, with firms also cutting back on input buying as the outlook grows gloomier,” Chris Williamson, chief business economist at IHS Markit, said after the release of the report Aug. 1. “U.S. manufacturers’ expectations of output in the year ahead has sunk to its lowest since comparable data were first available in 2012.”

Uncertainties surrounding trade situations are also weighing on the global economy and stoking recession fears. The Morgan Stanley report points to corporate investments and how both new and existing tariffs could pressure corporations to reduce hiring in order to maintain profits.

“Rising tariffs will likely exacerbate the existing downward pressures on corporate margins and profitability. Hence, corporates could soon move to the next stage, cutting back on hiring,” Ahya said. “As it is, consumer sentiment has taken a hit in August and the drop was very clearly driven by the announcement of further tariffs and to some extent the resulting stock market volatility.”

August has been a volatile month in the stock market as investors react to developments in the U.S.-China trade war and recession warnings in the bonds market. More than half the trading days have witnessed a swing in the S&P 500 of 1% or more, according to CNBC. The index is down more than 2.5% in August, but it is still up more than 15% for all of 2019.

The Associated Press contributed to this story.