This article was originally published by Michael Snyder at The Economic Collapse Blog.
Not since 2008 have we seen so much bad economic data come rolling in all at the same time. Even without a war with Iran, which by the way is looking increasingly likely with each passing day, it definitely appears that the U.S. economy is steamrolling toward recession territory.
The employment numbers for last month were abysmal, global trade has collapsed to the lowest level that we have seen since the last recession, and manufacturing numbers just keep getting worse and worse. In fact, the New York Fed’s Empire State manufacturing index just suffered the worst one month decline in history…
The New York Fed’s Empire State business conditions index took a sharp turn for the worse in June, falling into negative territory for the first time in more than two years.
The Empire State manufacturing index plummeted 26.4 points to negative 8.6 in June, the New York Fed said Monday. That’s a record decline. Economists had expected a reading of positive 10, according to a survey by Econoday.
Not even during the last recession did we witness a plunge of that magnitude.
And other measures of U.S. manufacturing activity are also “sinking steadily”…
And it’s not the only indicator showing a turn for the worse: Others, including the Federal Reserve Bank of Philadelphia’s Manufacturing Business Outlook Survey, have also been sinking steadily.
When you step back and look at the big picture, it becomes quite clear what is happening.
At this point, it is simply not possible for anyone to credibly claim that the U.S. economy is still in good shape. All of the numbers are pointing in the same direction, and Morgan Stanley’s chief US equity strategist Michael Wilson made this point exceedingly well on Monday…
Decelerations and disappointments are mounting:
- Cass Freight Index
- Retailer earnings
- Durable goods orders
- Capital spending
- May payrolls
- Semiconductor inventories
- Oil demand
- Restaurant performance indices…
and our own Morgan Stanley Business Conditions Index (MSBCI). Looking at the MSBCI in particular, the headline metric showed the biggest one-month drop in its history going back to 2002 and very close to its lowest absolute reading since December 2008.
This index has a tight relationship with ISM new orders and analyst earnings revisions breadth. Our analysis shows downside risk to ISM new orders (25% y/y), S&P earnings revisions breadth (6-13%) and the S&P 500 y/y (8%) if historical links hold.
For much more on the collapse of the MSBCI, please see my previous article entitled “Morgan Stanley’s Business Conditions Index Just Suffered The Biggest One Month Decline In History”.
Many analysts are pointing out that our economic problems really seemed to start accelerating once trade negotiations with China completely broke down, and this is true.
If the U.S. and China could find a way to reach a trade agreement, that would be a tremendous short-term boost to the economy at a time when we desperately need it.
But that isn’t going to happen unless President Trump completely caves in. Because at this point the Chinese are extremely angry, and they are definitely in no mood to compromise. In fact, one Chinese editorial that was recently published boldly declared that they are ready “to fight it out till the end”…
“China will not be afraid of any threats or pressure the United States is making that may escalate economic and trade frictions. China has no choice, nor escape route, and will just have to fight it out till the end,” the Qiushi commentary said. “No one, no force should underestimate and belittle the steel will of the Chinese people and its strength and tenacity to fight a war.”
When Americans are deeply suffering during the next recession, will they be willing to “fight it out till the end” like the Chinese are?
And if a trade war with China wasn’t enough, now we also have a trade war with India to deal with. In fact, India just hit U.S. exports with a wave of very large tariffs…
India just increased tariffs on US exports, dealing another blow to fragile global trade.
The tariffs on several US products will go into effect on June 16, India’s Finance Ministry said in a statement Saturday. The goods targeted include American apples — which will be hit with a 70% tariff — as well as almonds, lentils and several chemical products.
Of course, these tariffs were in retaliation for the tariffs that we hit India with after Trump kicked them out of a preferential trade program…
The two countries exchange goods and services worth about $142 billion a year, but the relationship has soured in recent weeks after the Trump administration ended India’s participation in a preferential trade program earlier this month. The program exempted Indian goods worth more than $6 billion from US import duties in 2018.
We were certainly heading for a recession even without these trade conflicts, but without a doubt, they have made things substantially worse.
And now is definitely not a good time for a recession, because much of the country is completely and utterly unprepared for any sort of an economic downturn. The following comes from an opinion piece authored by William Spriggs…
One oft-cited statistic points to just how unstable the finances of most Americans are: nearly 40 percent of households could not withstand an unexpected expenditure of $400 — the cost of just one medical bill or car repair.
The most unnerving point to keep in mind is that we are even less prepared for a sudden slowing of the economy than we were before the Great Recession of 2008.
During the relatively stable economic times of the past few years, Americans should have been preparing instead of partying.
But instead, most Americans bought into the myth that our massively bloated debt-fueled standard of living could be perpetuated indefinitely.
So now a crisis is coming which many believe is going to be even worse than what we experienced in 2008, and most of us are going to be completely blindsided by it.
Across the ages, in every survival story, a disaster of some sort plays a prominent role. Sometimes the part is played by the government, sometimes it is played by Mother Nature, and other times, the role is taken on by a random mishap. If we have learned one thing studying the history of disasters, it is this: those who are prepared have a better chance at survival than those who are not. – Tess Pennington, The Prepper’s Blueprint
No amount of Sugar will help this t*rd of an economy taste better. But I plan on putting that to the test. This month a stocked up on Kool-Aid now I need more sugar. Next month I know what my monthly prep allowance will be spent on. Ans as we all know…
First you get the sugar… Then you get the power… then you get the women
I guess we can’t post YouTube Videos anymore? That stinks!
“Americans should have been preparing instead of partying.”
The point is sound. The message is responsibility.
If you live like a fool, partying and spending wildly on stupid things like meaningless encounters with multiple persons of the opposite sex, drugs and alchohol, and expensive entertainment, gambling, and “vacations; whiling away your time and hard earned money, you will pay dearly in the end.
Better to buy good tools and learn to use them.
Hp see if you can hang.
Usually take a trip through the local industrial park every few weeks just to see how much new construction there is to accommodate all the industry coming back from China. Haven’t seen any yet…just a lotta “for lease” and “for sale” signs.
Patience, patience…they DID say they’re gonna put a beer garden in the Family Dollar, so at least some business is expanding.
Businesses around here can’t find enough help. And there’s plenty of new construction. There’s even a brand new bank just starting to be built around the corner.
We’re doing fine here. If I wanted to work, I could go out tomorrow and have a job in an hour or less.
finally someone else that sees what im seeing. jobs are everywhere. help wanted signs are out everywhere.the state needs to cut unemployment bennies and other freebees forcing people to have to get a job. the free ride is over parasites.
ot…Next Sec of War Mike Pompeo?
Big fashion retailers have used clothing drop boxes in front of their stores. They take old donated clothes and spin them into new, crappy made trendy clothes. Just one example of big business beggars coming out with a new scheme to make a buck.
What I find a little scary is how many people for a variety of reasons live close to the “edge”.
When I was in the military and first got married, we qualified for welfare, we toughed it out without the welfare. Since the war was very over, my duty assignment allowed me to go to school and I had skills so I could work at handyman jobs also. I built my own furniture, dug through the local dump for appliances to repair and use. The wife’s first washer came from the dump, it had a timer, I hacked together using a wall clock to run the cam mechanism. When I had to replace the exhaust on my truck
I laid in the mud at a self serve Junk yard to get the parts from a totaled truck that still had fresh blood in the passenger area.
I crawled out of the hole. I think other people can do the same, if they try. Life isn’t fair, but in the richest country in the entire history of man, I just can’t see why so many are so “weak”.
Back in the day we also had a washer the timer went out. I rigged up light switches to work the cycles you could let it agitate or spin as long as you wanted. We watched the Movie overdoard and really laughed when Goldie Hawn had the garden hose & sprayer in the sink. Because our faucets had went bad and we were doing the exact same thing. And I see the author of this is still doing the blame the Tariffs bullshit. The lack of Tariffs Free Trade destroyed the making producing middle class. A economic bubble can only get so big. Even if there wherent any Tariffs things would still regress. We are a nation in decline. Ole Creepy Joe is talking Revolution if Trump wins a second term.
I admire your patience and ingenuity, but you had to really babysit, the wash for fill, drain, spin spray. et al. That is why the older timers had such an elaborate mechanical timer. Maybe you had the old ringer type machine? That is an easy light switch rig.
My great grandmother had a gasoline motor driven washing machine. I wish I had grabbed it before her daughter, my grandma tossed it.
Until they put computers in appliances I got to be pretty good at fixing appliances. I can still fix them still, but why replace a $500 computer when you can buy a new machine for $800?
Because people aren’t hungry, starving people motivate themselves.
As long as there’s people trying to “Keep up with the Jones’s” there will always be those who are struggling to make ends meet..
Don’t worry what the neighbors and friends have,and STOP trying to impress people..
Live within your means and you’ll be alright, but try living a magazine lifestyle on a salary that is barely above the poverty line and you will be up sh*t creek without a paddle so fast it will make your head swim..
Everything is good with me so far. Just sitting here nawling on one of last nights fried chicken legs and drinking some Black Rifle coffee. The world stills seems to be spinning.
RECESSION ALERT BUY RAVIOLI AND SILVER NOW!! I told my ex wife it would happen. Now it won’t matter that I wasted all our money on canned goods and silver. My ex wife said I was wasting all of our savings on nonsense but she was wrong, the only price I had to pay was my loneliness. Hopefully the economy collapses before the cancer gets me or I’ll feel really stupid.
I may have no friends or family but I have a stockpile of ravioli and ammo to keep me company through my cancer and loneliness. Am I right boys?
The more I convince myself “the collapse is coming” the less stupid I feel. Am I right boys???
Boys?? Anybody there?
Demand Censorship FREE Internet.
DEMAND free discussion without website censors like the ones here.
Go to Youtube. There is a channel: Ritchiefromboston, he has interesting 911 video up. it is also on sgtreport, link is lower left on this shtfplan site.
Watch video while you can before banned by tech monopoly tyrants. They want you to be dumbed down livestock for the endless war mongering debt ridden machine.
The Truth will set you Free. Censorship Free Internet-Freedom or Death-Live Free or Die-Come and Take It. STAND.
Tech Monopoly Tyrants are Not our Masters. RESIST Leftist commie NWO control grid matrix 1984 hell hole.
FREEDOM LIBERTY JUSTICE. Traditional American values.
AMERICA FOR AMERICANS
“No one, no force should underestimate and belittle the steel will of the Chinese people and its strength and tenacity to fight a war.” (rawr)
If you steal R&D, why does everything you make still fall apart.
This is the same country, where that insane heart surgery robot came from. (Not the original designs.)
Are your work orders like when we buy something, and you just substitute whatever?