Economic Downturn

The U.S. Economy Hasn’t Experienced Anything Like This Since The Great Depression Of The 1930s

The recession of 2008 and 2009 was bad, but it was nothing like this.  Even though this new economic downturn is only a few months old, we are already seeing numbers that we haven’t seen since the worst parts of the Great Depression of the 1930s.  More than 48 million Americans have filed new claims for unemployment benefits over the past 15 weeks, well over 100,000 businesses have permanently closed their doors, and civil unrest has turned quite a few of our major cities into war zones.  But not all areas of the country are being affected equally.  For example, there are rural areas that haven’t really seen a lot of COVID-19 cases where life seems to have changed very little from six months ago.  On the other hand, some urban areas that have been hit really hard by COVID-19 have been absolutely devastated economically.  For example, the New York Times is reporting that a million jobs have been lost in New York City, and the unemployment rate for NYC “is hovering near 20 percent”…

The city is staggering toward reopening with some workers back at their desks or behind cash registers, and on Monday, it began a new phase, allowing personal-care services like nail salons and some outdoor recreation to resume. Even so, the city’s unemployment rate is hovering near 20 percent — a figure not seen since the Great Depression.

We are going to be using the phrase “since the Great Depression” a lot in the coming months.

Fear of COVID-19 is going to paralyze our economy for the foreseeable future, and all of this fear is hitting some companies more severely than others.  On Tuesday, Levi Strauss announced that sales were down a whopping 62 percent during the second quarter…

The denim maker Levi Strauss & Co.’s sales fell 62% during its fiscal second quarter, the company announced Tuesday, as its online sales weren’t enough to make up for its stores being temporarily shut for roughly 10 weeks during the Covid-19 crisis.

If Levi Strauss expected this to be just a temporary setback, they would probably try to keep all of their employees on board.

But instead, they apparently believe that hard times are here to stay and they have just decided to eliminate “about 700 jobs”…

Levi’s also announced it will be slashing about 15% of its global corporate workforce, impacting about 700 jobs, in a bid to cut costs during the coronavirus pandemic. It said the move should generate annualized savings for Levi’s of $100 million.

Of course a whole lot of other companies are laying off workers right now too.  Another 1.427 million Americans filed new claims for unemployment benefits last week, and that is an absolutely catastrophic number.  Prior to 2020, the worst week in all of U.S. history for new unemployment claims was in 1982 when 695,000 unemployed workers filed in a single week.  So what we are witnessing right now is nothing short of a “tsunami of job losses”, and even CNN is admitting that millions of the jobs that have been lost “are never coming back”…

The American economy’s unprecedented jobs rebound masks a difficult truth: For millions of people, the jobs they lost are never coming back.

“It’s clear that the pandemic is doing some fundamental damage to the job market,” said Mark Zandi, chief economist for Moody’s Analytics. “A lot of the jobs lost aren’t coming back any time soon. The idea that the economy is going to snap back to where it was before the pandemic is clearly not going to happen.”

I couldn’t have said it better myself.

Since most Americans were living paycheck to paycheck before this pandemic erupted, millions of unemployed workers have found themselves in desperate need very suddenly.  I have written numerous articles about the massive lines that we have been witnessing at food banks around the nation, and we just witnessed another two mile long line at a food bank in Florida…

More than 700 cars were seen waiting in a two-mile long food bank line in Florida as the US grapples with nearly half of Americans being unemployed amid a spike in new coronavirus cases that has sparked fears of more shut downs and lay-offs.

Sunrise Assistant Leisure Services Director Maria Little, who was put in charge of food distribution for the city when the coronavirus hit the US in March, said her group served about 720 cars in Miami on Wednesday.

This is not what a “recovery” looks like.

In fact, for certain sectors of the economy the numbers are rapidly getting a lot worse.  For instance, just check out what CNBC is reporting…

Delinquencies in commercial mortgage-backed securities last month had their largest one-month surge since Fitch Ratings began tracking the metric nearly 16 years ago.

The delinquency rate hit 3.59% in June, an increase from 1.46% in May. New delinquencies totaled $10.8 billion in June, raising the total delinquent pool to $17.2 billion.

And Fitch Ratings is warning that these numbers are going to get far worse in the months ahead.

And this is just the beginning. Fitch analysts are projecting that the impact from the coronavirus pandemic will drive the delinquency rate to between 8.25% and 8.75% by the end of the third quarter of this year.

I have said this before, and I will say it again.

We are on the verge of the biggest commercial mortgage meltdown in the history of the United States.

Countless restaurants and retailers are getting way behind on their rent payments, and as a result many owners of commercial property are finding it increasingly difficult to make their mortgage payments.

The dominoes are starting to fall, and this is going to get really, really messy as we head into 2021 and beyond.

Of course the same thing could be said for the U.S. economy as a whole.

I know that I haven’t been posting quite as often the last couple of weeks, and that is because I have been finishing my new book.  It is not too far from being completed, and it is going to be the most important thing that I have written so far.

We are right on the precipice of the most chaotic chapter in all of American history, and a collapsing economy is just going to be one element of “the perfect storm” that we are facing.

So please use the summer months to get prepared for what is ahead, because even though things are bad right now, the truth is that we have only experienced the leading edge of “the perfect storm” so far.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

Uh Oh: U.S. Layoffs Rise 38 Percent – Highest Level For August Since 2009

We continue to get more numbers that indicate that U.S. economic activity is really starting to slow down.  According to Challenger, Gray & Christmas, the number of layoffs in the United States was 38 percent higher in August than it was in July.  A 38 percent increase in one month is more than just a little bit startling, and many believe that if this momentum continues we could soon be facing an avalanche of job losses similar to what we witnessed in 2008.  And without a doubt, all of the other economic numbers that have been rolling in lately also confirm that the U.S. economy is heading into harder times.  But is our country ready to handle another major economic downturn?

Even though there have been moments of difficulty over the past decade, we truly haven’t seen anything like this since the last recession.  In fact, the latest job cut numbers that we just got from Challenger, Gray & Christmas are the highest that we have seen during any August since 2009…

Employers also announced the most layoffs of any August since 2009, the outplacement firm Challenger, Gray & Christmas said.

Job cuts rose 38 percent over July, with 53,480 positions to be slashed from employer payrolls, led by workforce reductions in health care, which had been a mainstay of recent job creation, the tech sector and manufacturing.

So why is this happening?

Well, certainly there are many factors at play, but Andrew Challenger has singled out “the trade war” as one of the biggest reasons…

“Employers are beginning to feel the effects of the trade war and imposed tariffs by the US and China,” Andrew Challenger, the firm’s vice president, said in a statement.

Other nations are really starting to feel the effects of the trade war as well.  This week, Germany reported a startling drop in new manufacturing orders…

Contracts for ‘Made in Germany’ goods fell 2.7% from the previous month in July, data showed on Thursday, driven by a big drop in bookings from non-euro zone countries, the economy ministry said. That undershot a Reuters consensus forecast for a 1.5% drop.

“The misery in manufacturing continues. The decline in new orders significantly increases the risk of a recession for the German economy,” VP Bank analyst Thomas Gitzel said.

During the second quarter, German GDP growth fell into negative territory, and it looks like that will happen again here in the third quarter.

That would mean that Germany is already in a recession right now, and that is very troubling news for all of Europe.

Here in the U.S., just about everything that we would expect to see happen just prior to the beginning of a recession is happening in textbook fashion right in front of our eyes.

In particular, the transportation industry is already mired in a very deep downturn, and we just learned that orders for heavy trucks in August were down by 80 percent compared to a year earlier…

Orders for heavy trucks that haul part of the economy’s goods across the US plunged by 80.1% in August 2019 compared to August last year, to about 10,400 orders, according to preliminary estimates by FTR Transportation Intelligence. It was the 10th month in a row of year-over-year declines, and the second month in a row of 80%-plus declines, with orders in July having plunged 81.2% to about 9,800, not seen since 2010.

I don’t know about you, but an 80 percent decline sure seems like an awfully big red flag to me.

Overall, it is still being projected that the U.S. economy will stay out of contraction territory in the third quarter, but GDP forecasts have continued to slip.  The following comes from Reuters…

The U.S. economy is likely growing at a 1.7% annualized rate in the third quarter, based on weaker-than-forecast data on domestic manufacturing activity and construction spending, the Atlanta Federal Reserve’s GDPNow forecast model showed on Tuesday.

This was slower than the 2.0% pace estimated by the Atlanta Fed’s GDP program on Aug. 30.

In the end, any number above zero for the third quarter should be considered a big victory in this global economic environment.

But even if we eke out slight growth in the third quarter, nobody should be using the word “booming” to describe our economy.  In fact, we haven’t been “booming” for a very, very long time.  We haven’t had a full year when U.S. GDP grew by at least 3 percent since the middle of the Bush administration, and at this point nearly 40 percent of the nation struggles to pay for the basics…

Many people still struggle to pay bills — even for something as basic as food.

That’s the difficult conclusion of a new report released this week by the Urban Institute, a nonpartisan, nonprofit policy group based in Washington, D.C., which surveyed almost 7,600 adults last December. Some 39.4% of adults said their families had trouble meeting at least one basic need for food, health care, housing, or utilities last year.

The gap between the “haves” and the “have nots” continues to grow in our country, and that has dire implications for our future.  If those with money and power continue to have a “let them eat cake” attitude about all of this, eventually we will see chaos in our streets, and this is something that Umair Haque recently discussed…

How can the economy be “strong” when 40% of people are struggling to eat? Isn’t that a little bit like the Hunger Games actually coming to life? Is that where America is now? What on earth?

Think about the fact itself for a second, before we discuss it — 40% of people in the world’s richest country struggle to afford food. It’s a “Let Them Eat Cake” moment happening before our eyes. How much more Versailles can you get? There’s nothing — nothing — more basic than being able to afford food. When a society can’t provide food for its people, it’s one of the most severe and fundamental indicators that something’s badly, badly wrong.

More government handouts are certainly not the answer.  The U.S. government already hands out money and benefits to more than 100 million people every month, and yet our problems just continue to escalate.

In the end, people want to be able to work hard and provide for their own families.  We need an economy that creates more good paying jobs and makes it easy to start businesses, and we haven’t had such an economy for a very long time.

And now it appears that we are heading into a new economic crisis.  The job losses are likely to escalate in the months ahead, and many believe that the economic pain that we will experience will be even greater than what we experienced during the last recession.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

As Wall Street Celebrates Rising Stock Prices, Companies Are Literally Shutting Down All Over America

How long can the stock market possibly stay completely disconnected from economic reality?  On Monday, the Dow Jones Industrial Average rose just 27 points, but that was good enough to push it to yet another new all-time record high.  Investors have been absolutely thrilled by the extremely impressive bull run that we have witnessed so far in 2019, but there is no way that this is sustainable.  Wall Street may be celebrating for the moment, but meanwhile all of the hard economic numbers are telling us that we have now entered a new economic slowdown.  Just like in 2008, it appears to be inevitable that the party on Wall Street is about to hit a brick wall, but nobody should be surprised when it happens.  Everywhere around us there are signs of economic trouble, and right now companies are literally shutting down all over America.

For example, just take a look at what is happening to the trucking industry.  I recently warned about the trucking “bloodbath” that was unfolding, and over the past week it has greatly accelerated.

On the 12th of July, we learned that trucking giant LME had abruptly shut down.  The following comes from Zero Hedge…

Less-than-truckload carrier LME has reportedly “suddenly and abruptly” shut down its operations, according to FreightWaves.

The company is a regional carrier based in Minnesota that operated throughout the Midwest. The company had terminals in 30 locations across the U.S. and through interline agreements services all of North America. It also worked with major companies like 3M, John Deere and Toro.

The company reportedly included “over 600 men and women” and has been listed as having 382 power units and 1,228 trailers, with 424 truck drivers.

Then today we learned that Timmerman Starlite Trucking suddenly shut down without any notice…

40 year old California trucking outlet Timmerman Starlite Trucking, Inc. is the latest victim in the “trucking apocalypse” and announced that it would be shutting down effective immediately, according to FreightWaves.

30 employees are expected to lose their jobs as a result. The company is based in a mid sized city about 100 miles east of San Francisco and had a fleet of 30 trucks, 150 trailers and 28 drivers.

The company’s owner cited “a tough freight market and environmental regulations” as reasons for the shut down. The company announced the shutdown on its Facebook page.

Of course those two trucking companies are definitely not the only victims of this “bloodbath”.  According to Business Insider, ALA Trucking, Williams Trucking, Falcon Transport and New England Motor Freight have also completely ceased operations in 2019.

If the U.S. economy really was “booming”, this would not be happening.

Meanwhile, major retailers continue to fall like dominoes.  Charming Charlie is headed for bankruptcy and will be closing all of their stores…

Fashion accessory retailer Charming Charlie will close all its stores after going bankrupt for the second time in less than two years. More than 3,000 full- and part-time employees could lose their jobs.

Charming Charlie Holdings Inc. filed for Chapter 11 protection in Delaware with plans for going-out-of-business sales at about 261 stores, according to court documents. The chain expects the liquidation to take about two months.

In addition, we just learned that Fred’s will be shuttering another 129 stores as it desperately attempts to stay alive…

Troubled discount merchandiser Fred’s has announced another round of store closures.

The chain will shutter 129 stores, leaving it with about 80 locations, USA Today reported. Going-out-of business sales have already begun.

Not too long ago, I went to a going out of business sale at a local store that was closing down, and it was definitely depressing.  At one time the shelves had been packed full of products, but by the time I got there people were clawing through the small handfuls of deeply discounted merchandise that still remained.

Sadly, such scenes are being repeated over and over again all around the country.  In fact, things are already so bad that even Manhattan retailing legend Barneys is likely headed for bankruptcy…

Barneys may be on the cusp of filing for bankruptcy protection as the luxury Manhattan retailer contends with high rents and shoppers going online, according to two media reports.

Reuters, citing unnamed sources, reported Saturday that Barneys has tapped law firm Kirkland & Ellis LLP and is weighing a potential bankruptcy filing among other options that could occur in the coming weeks.

The all-time record for store closings in a single year was set in 2017 when 8,139 stores shut down.

According to a brand new report that was just released, we are on pace to absolutely shatter that old record.

In fact, Coresight says that the number of store closings in the U.S. could hit 12,000 by the end of this year…

The “going-out-of-business” sales and liquidation of other brands is expected to continue. Coresight estimates closures could reach 12,000 by the end of the year, the report said.

In The Beginning Of The End, I painted a picture of a future in which America’s communities would be littered by boarded up stores that had been abandoned by major retailers.

Now it is happening right in front of our eyes.

Everything that is taking place in the “real economy” makes perfect sense, and unfortunately our economic problems are likely to accelerate significantly in the months ahead.

What doesn’t make sense is what we are witnessing on Wall Street.

There is no way that stock prices should be rising like this, but financial bubbles don’t typically follow rational patterns.

Instead, they usually just keep going until something comes along to end them.

And considering everything that is going on in the world right now, that “something” could definitely arrive sooner rather than later.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

The Pain Of This New Economic Downturn Is Starting To Show Up All Over The Country

It is going to take a miracle for the U.S. economy to pull out of this tailspin, because the economic numbers are really starting to deteriorate very rapidly now.  On Tuesday we got some more new numbers, and they were just as bad as we thought they might be.  But even before today’s numbers all of the data were telling us the exact same thing.  The New York Fed’s Empire State manufacturing index just suffered the worst one month decline in U.S. history, Morgan Stanley’s Business Conditions Index just suffered the largest one month decline that we have ever seen, global trade numbers are the worst they have been since the last recession, and just last week I detailed the complete and utter “bloodbath” that we are witnessing in the U.S. trucking industry right now.  So considering what we already knew, it shouldn’t have been a surprise that new home sales in the U.S. were down a whopping 7.8 percent during the month of May…

Sales of new U.S. homes slumped 7.8% in May, as sales plunged in the pricier Northeastern and Western markets.

The Commerce Department said Tuesday that new homes sold at a seasonally adjusted annual rate of 626,000 in May, down from 679,000 in April. During the first five months of the year, purchases of new homes have fallen 3.7% compared to the same period in 2018.

Those are absolutely horrible numbers, and this is precisely what a recession looks like.

On Tuesday we also learned that U.S. consumer confidence is rapidly declining…

Consumer confidence is on the decline.

The Conference Board’s Consumer Confidence Index tumbled to 121.5 in June, dropping from a downwardly revised reading of 131.3 in May and snapping three consecutive months of improvements.

June’s results missed consensus expectations for a reading of 131.0, according to Bloomberg-compiled data, and marked the lowest level in nearly two years.

Once again, this is precisely what we would expect to see during a recession.

And yet I continue to see some clueless mainstream media reports that insist that the U.S. economy is doing well.  Apparently FedEx didn’t get that memo, because they lost nearly 2 billion dollars in the quarter ending May 31st…

In the fiscal fourth quarter, which ended May 31, FedEx reported a loss of $1.97 billion, compared with profit of $1.13 billion a year earlier.

FedEx blamed this horrible number on the ongoing global economic slowdown, and unfortunately things are not likely to get any better for them any time soon.

Many in the mainstream media continue to speak of “the next recession” as some future event, but when we get the final economic numbers many months from now we may discover that it had already started by now.  In fact, one prominent economist recently stated that he believes that “we’re probably already in a recession”…

Gary Shilling, an economist and financial analyst who is credited with predicting several recessions over the past 40 years, thinks the U.S. is in a relatively mild slump.

“I think we’re probably already in a recession but I think it will probably be a run-of-the-mill affair, which means real GDP would decline 1.5% to 2%, not the 3.5% to 4% you had in the very serious recessions,” Shilling, president of economic and financial research firm A. Shilling & Co., said in a recent interview broadcast this week by Real Vision.

And even Federal Reserve Chair Jerome Powell is now admitting that our economic outlook has become “cloudier”.  The following comes from ABC News…

Federal Reserve Chairman Jerome Powell said Tuesday the economic outlook has become cloudier since early May, with rising uncertainties over trade and global growth causing the central bank to reassess its next move on interest rates.

Speaking to the Council on Foreign Relations in New York, Powell said the Fed is now grappling with the question of whether those uncertainties will continue to weigh on the outlook and require action.

I find it very interesting that Powell chose the Council on Foreign Relations as the venue for this address.  I think that tells us a lot about where Powell’s true loyalties are.  The Council on Foreign Relations has dominated the political landscape in Washington for a long time, and this has been true no matter which political party has been in power.

Meanwhile, the global trade war continues to intensify, and over 300 companies are literally begging the Trump administration to find a way to end it…

More than 300 companies are talking to government officials in Washington this month about how detrimental the trade war between the U.S. and China has been and will be to their business.

Testifying in front of the Office of the U.S. Trade Representative, major U.S. companies including Best Buy, HP and Hallmark Cards are voicing concerns about how the additional tariffs that President Donald Trump threatened to slap on China would impact their businesses and cause them to lose business to foreign competitors.

Sadly, it isn’t likely that the trade war will end any time soon.

In fact, it is probably much more likely that a shooting war will start in the Middle East instead.  And if that happens, our current economic problems will dramatically escalate.

The wheels are starting to come off, and the U.S. economy is beginning to spin out of control.  Perhaps the Federal Reserve will be able to pull another rabbit out of the hat and pull off a miracle once again, but I doubt it.  We haven’t seen conditions like this since the great financial crisis of 2008, and the remainder of 2019 threatens to be extremely “interesting” indeed.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

This Wasn’t Supposed To Happen: U.S. Employment Growth Just Plunged To The Lowest Level In 9 Years

If the U.S. economy was heading into a recession, we would expect to see a slowdown in the employment numbers, and that is precisely what is happening.  According to payroll processing firm ADP, the U.S. economy only added 27,000 new jobs in May, and that is way below the number that is needed just to keep up with population growth.  Of course some in the mainstream media are attempting to put a positive spin on this, but there really is no denying that this is a truly awful number.  In fact, we have not seen a number this bad in more than 9 years…

Job creation skidded to a near-halt in May in another sign that the U.S. economic momentum is slowing.

Companies added just 27,000 new positions during the month, according to a report Wednesday from payroll processing firm ADP and Moody’s Analytics that was well below Dow Jones estimates of 173,000.

The reading was the worst since around the time the economic expansion began and the jobs market bottomed in March 2010 with a loss of 113,000.

9 years is a very long time, but this terrible employment number is perfectly consistent with all of the other horrible economic numbers that have been rolling in lately.

Time after time in recent weeks I have been using phrases such as “since the last recession” to describe what we are witnessing.  The U.S. economy has not been in such rough shape in nearly a decade, and things just keep getting worse.

So how did Wall Street respond to the latest employment news?

Actually, stock prices surged, because investors are super excited about the prospect that the Federal Reserve could soon lower interest rates…

Stocks added to strong week-to-date performance on Wednesday as investors grew even more confident that the Federal Reserve will lower interest rates this year to reignite an economy wounded by trade battles.

The Dow Jones Industrial Average rose 207.39 points to 25,539.57, while the S&P 500 advanced 0.8% to 2,826.15. The Nasdaq Composite closed 0.6% higher at 7,575.48.

Pushing interest rates all the way to the floor certainly helped the stock market recover after the last recession, but this time around there is a major twist.

The U.S. is currently engaged in a major trade war with China, and the normal tools that the Fed utilizes may not be powerful enough to overcome the negative effects of such a conflict.

And to make things worse, now the U.S. is also starting a trade war with Mexico.  On Wednesday, President Trump made it clear that “not nearly enough” progress had been achieved during negotiations with Mexican officials…

President Donald Trump said “not nearly enough” progress was made in talks with Mexico to mitigate the flow of undocumented migrants and illegal drugs, raising the likelihood that the U.S. will follow through with tariffs next week.

So tariffs will be slapped on Mexican goods starting on Monday, and President Trump seems quite excited about this…

“If no agreement is reached, Tariffs at the 5% level will begin on Monday, with monthly increases as per schedule,” Trump tweeted Wednesday. “The higher the Tariffs go, the higher the number of companies that will move back to the USA!”

Of course the Mexicans will almost certainly retaliate, and both countries will start seeing higher prices and significant job losses.

In fact, one study has concluded that the U.S. economy could lose more than 400,000 jobs as a result of these tariffs on Mexico.  The following comes from CNN…

If the 5% US tariff on all goods from Mexico takes effect and is maintained, more than 400,000 jobs in the United States could be lost, an analysis released this week found.

The tariffs on Mexico, set to go in effect on Monday, would cost Texas alone more than 117,000 jobs, according to the analysis by The Perryman Group, an economic consulting firm. Texas is Mexico’s largest export market, making the two economies closely intertwined.

And the truth is that those numbers could actually be on the low side.

According to Marc Thiessen, a trade war with Mexico would literally put millions of U.S. jobs at risk…

Indeed, Mexican tariffs could be even more devastating for Americans than those imposed on China. Deutsche Bank estimates the tariffs could raise the average price of automobiles sold in the United States by $1,300. Indeed, U.S. and Mexican auto-supply chains are so deeply integrated that many parts cross the border multiple times before they end up in a finished vehicle — which means they would be hit by tariffs multiple times, compounding costs. Ten million U.S. workers’ jobs depend on this supply chain; tariffs would put those jobs at risk, including those of the “forgotten Americans” in the industrial Midwest whose jobs Trump vowed to protect.

We shall see what happens, but the outlook for the U.S. economy for the rest of this year is not good at all, and beyond that things look exceedingly grim.

Hopefully I am wrong, but it certainly appears that a major economic downturn is developing just in time for the 2020 presidential election.

There is one more thing that I would like to mention before I wrap up this article.  This week, a Russian news source reported that Russia and China “will sign an agreement” regarding the use of their own national currencies in bilateral trade with one another…

Russia and China will sign an agreement on possible payments in national currencies. A decree of the Russian government on signing of a relevant agreement with the Chinese side was released on the official portal of legal information on Wednesday.

According to the draft decree approved through that government document, “settlements and payments for goods, service and direct investments between economic entities of the Russian Federation and the People’s Republic of China are made in accordance with the international practice and the legislation of the sides’ states with the use of foreign currency, the Russian currency (rubles) and the Chinese currency (yuan).”

In other words, they are dumping the dollar in favor of their own national currencies when trading with each other.  This is a direct threat to the international dominance of the U.S. dollar, and other countries have been discussing similar moves.

For decades, the U.S. dollar has essentially been a global currency.  More dollars are actually used outside of the United States than within this country, and most Americans don’t realize that.

This has given us some enormous advantages in the global marketplace, and it could be just a matter of time before those advantages begin to disappear.

Things that used to take months or years to happen are now happening in a matter of days.  The pace of change is really picking up, and right now the momentum of events is heading in a direction that is definitely not favorable to the United States.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

Even Before The Recession Has Officially Begun, Some Large U.S. Firms Are Laying Off Thousands Of Workers

If the U.S. economy is “booming” and very bright days are ahead, then why are many large U.S. corporations laying off thousands of workers?  Layoffs are starting to come fast and furious now, and this is happening even though the coming recession has not even officially started yet.  Of course many are convinced that we are actually in a recession at this moment.  In fact, according to John Williams of shadowstats.com if the government was actually using honest numbers they would show that we have been in a recession for quite some time.  But the narrative that the mainstream media keeps feeding us is that the U.S. economy is “doing well” and that the outlook for the future is positive.  Well, if that is true then why are big companies laying off so many workers right now?

Let’s start by talking about Ford Motor Company.  On Monday, they announced that they will be laying off approximately 7,000 workers…

Ford Motor said Monday that it is laying off about 7,000 managers and other salaried employees, about 10% of its white-collar workforce across the globe, as part of a restructuring plan designed to save the No. 2 automaker $600 million annually.

The cuts, some of which were previously announced by the company, will be completed by August, Ford CEO Jim Hackett said in an email to employees Monday.

If the U.S. economy was about to take off like a rocket, this move doesn’t make any sense at all.

But if we are headed into a recession, this move makes perfect sense.

Another large firm that is laying off thousands of workers is Nestle…

Nestle SA’s U.S. unit will dismiss about 4,000 workers as it stops delivering frozen pizza and ice cream directly to stores and transitions to a warehouse model that’s becoming an industry standard for Big Food companies looking to trim costs.

And we also recently learned that 3M is planning to get rid of about 2,000 workers…

3M plans to cut 2,000 globally as part of a restructuring due to a slower-than-expected 2019.

The maker of Post-it notes, industrial coatings and ceramics said Thursday that the move is expected to save about $225 million to $250 million a year. The St. Paul Minnesota-based company anticipates a pretax charge of about $150 million, or 20 cents per share, this year.

Did you catch that part about these layoffs being due to “a slower-than-expected 2019”?

Unfortunately, things are slow for a lot of companies out there these days.

Another company that is dumping a large number of workers is MGM Resorts…

MGM Resorts International MGM, -2.09% plans to cut about 1,000 positions by the end of the current quarter amid a cost-cutting and operational overhaul that calls for fewer managers across its properties.

That figure includes some 254 positions that the company moved to eliminate last week.

In addition, Dressbarn just announced that all of their stores will be closing…

Dressbarn is closing all of its stores.

The women’s retailer announced Monday “plans to commence a wind-down of its retail operations, including the eventual closure of its approximately 650 stores.”

I am not sure how many employees they have per store, but even if it is just a handful we are talking about the loss of thousands of jobs.

The U.S. economy has been slowing down for months, and now the complete breakdown of trade talks with China threatens to plunge us into a prolonged trade war.  As I noted in another article, a couple of different studies have concluded that an extended trade war could literally cost our economy millions of lost jobs.

And once the job losses start rolling, they can really get out of hand very quickly.  We saw this in 2008, and it is just a matter of time until we see it happen again.

On Sunday, a reader sent me an article about a factory closing that was happening in her neck of the woods in Pennsylvania.  One worker that was laid off said that the closure of the facility “was the final kick in the gut”…

Robert and Brooks Gronlund, owners of Wood-Mode Inc., wrote a text to workers Friday, saying they “are extremely appreciative” of the employees’ contributions and commitments. The company owners then confirmed all of them were terminated, as were their benefits.

“It was the final kick in the gut,” Michele Sanders, a 22-year employee of the company, said Saturday.

The privately-owned company in Kreamer, which produced custom wood cabinets, shut its doors Monday, leaving nearly 1,000 people without jobs. The abrupt closure of the plant stunned workers and community leaders.

So now almost 1,000 people do not have a way to support themselves and their families.

We are talking about hard working people with real hopes and real dreams.

Kreamer is a very small town.  According to Wikipedia, only 773 people live within the city limits, and so obviously there are not a lot of employment opportunities in the town.

And if those workers are anything like the rest of the U.S. population, most of them were probably living paycheck to paycheck.

I keep encouraging my readers to build an emergency fund, because you never know when you will be next on the employment chopping block.  I personally know a number of people that have just lost their jobs, and it can be an absolutely devastating experience.

Unfortunately, it looks like what we have witnessed so far is just the beginning.  All of the numbers tell us that economic activity is slowing down, and so we should all get ready to potentially face a rapidly deteriorating economic environment during the second half of 2019.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

The Psychological Bubble That Has Been Propping Up The U.S. Economy Is Starting To Implode

Optimism can be a very powerful thing.  For a long time Americans believed that things would get better, and that caused them to take action to make things better, and that actually resulted in things moving in a positive direction.  But now things have abruptly shifted.  In late 2018, an increasing number of Americans believe that an economic downturn is coming, and they are taking actions consistent with that belief.  As a result, they are actually helping to produce the result that they fear.  And without a doubt, any rational person should be able to see that signs that the U.S. economy is slowing down are all around us.  So it isn’t as if those that are preparing for the worst are being irrational.  It is just that when large numbers of people all start to move in the same direction, it has a very powerful effect.  We witnessed this in the stock market in recent years when people just kept buying stocks even though they were massively overvalued.  The collective belief that there was money to be made in the stock market became a self-fulfilling prophecy which pushed stock prices up to absurd heights.  But now that process is beginning to reverse as well, and ultimately the unwinding of that bubble will be quite painful.

Over the past couple of years the dominant economic narrative that the mainstream media was pushing was that the U.S. economy was “booming”, and this encouraged businesses to expand and consumers to go out and spend money.

But now the dominant economic narrative has changed, and businesses are starting to take actions that are consistent with the new narrative.  In the retail industry, if executives truly believed we would see an economic boom in the years ahead they would be expanding, but instead stores are being closed at a record pace…

Mall and shopping center owners across the U.S. are preparing to be hit by more store closures, following a brutal year that included department store chains like Bon-Ton and Sears going bankrupt, Toys R Us liquidating and even Walmart shutting dozens of its club stores.

Now, a slew of specialty retailers like Gap and L Brands are getting serious about downsizing, which will leave more vacant storefronts within malls until landlords are able to replace tenants.

As a result of these store closings, large numbers of workers will be without jobs, vendors will not be receiving orders and mall owners will be without tenants.

In other words, economic activity will slow down.

Another sector where there has been a major psychological shift is in the real estate industry.  Home prices have been falling all over the nation, and this includes markets that were once extremely hot such as San Francisco…

In San Francisco, the number of homes with a price cut in October nearly doubled, to 238 from 124 last October, according to data from Realtor.com.

That’s nothing compared to Santa Clara County, where the number of price cuts rose to 818 last month, more than six times last year’s number. Santa Clara County had been one of the nation’s hottest markets this year, and the Bay Area’s price appreciation leader until September.

“Clearly, there is a market shift,” said Rich Bennett, a Zephyr agent in San Francisco.

If homeowners believed that this dip was just temporary and that home prices would start surging again next year as the U.S. economy thrives, it would be quite foolish of them to slash their prices like this.

In some cases, home prices are being reduced by hundreds of thousands of dollars.  Why throw all of that money away if the market is going to bounce back shortly?

Over in the auto industry, there has also been a noticeable psychological shift.

If the U.S. economy was going to be doing extremely well in the years ahead, the major automakers should all be gearing up for record sales.

But instead, General Motors just shut a bunch of factories and laid off 14,000 workers, and Morgan Stanley analyst Adam Jonas is projecting that Ford will soon be laying off large numbers of employees…

“We estimate a large portion of Ford’s restructuring actions will be focused on Ford Europe, a business we currently value at negative $7 billion,” Jonas wrote. “But we also expect a significant restructuring effort in North America, involving significant numbers of both salaried and hourly UAW and CAW workers.”

Ford’s 70,000 salaried employees have been told they face unspecified job losses by the middle of next year as the automaker works through an “organizational redesign” aimed at creating a white-collar workforce “designed for speed,” according to Karen Hampton, a spokeswoman.

“These actions will come largely outside of North America,” Hampton said of Ford’s restructuring. “All of this work is ongoing and publishing a job-reduction figure at this point would be pure speculation.”

Shifting gears, let’s talk about agriculture.

If farmers believed that the trade war was just temporary and that things would soon swing back in their favor, many of them would keep trying to hold on for as long as they possibly could.

But instead, farm bankruptcies are absolutely surging…

A total of 84 farms in the upper Midwest filed for bankruptcy between July 2017 and June 2018, according to the Minneapolis Star Tribune. That’s more than double the number of Chapter 12 filings during the same period in 2013 and 2014 in Wisconsin, Minnesota, North Dakota, South Dakota, and Montana, reported Vox.

Farms that produce corn, soybeans, milk, and beef were all suffering due to low global demand and low prices before the trade war, according to economists, but president Trump’s trade war is making the problem even worse by exacerbating the weaknesses in the American economy. China has retaliated against the tariffs by slapping billions of dollars worth of tariffs on United States agriculture exports in response to Trump’s tariffs on Chinese products. Other countries, including Canada, have also added duties to US agriculture products in response to Trump’s tariffs on all imported steel and aluminum.

Most Americans want to have hope, but when they look at our economic situation all they see is a very bleak future.

And in some parts of the nation, there still hasn’t been any sort of a “recovery” from the last recession.  For example, a recent Bloomberg article took a hard look at what conditions are currently like in eastern Kentucky…

Tiffany Hensley’s drive home takes her through some picturesque scenery, and an ugly economy.

“The first thing you see when you get down here is beauty,” says Hensley, midway through her shift at a diner in the rolling hills of eastern Kentucky. “But then you get to looking around. It’s real rough.’’

Of course eastern Kentucky is far from alone.  Yes, coastal cities such as San Francisco and New York have prospered in recent years, but rural communities all across America have been deeply suffering.

And now economic conditions are deteriorating once again nationally, and things are about to get a whole lot tougher for everyone.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

3 Things That Happened Just Before The Crisis Of 2008 That Are Happening Again Right Now

Real estate, oil and the employment numbers are all telling us the same thing, and that is really bad news for the U.S. economy.  It really does appear that economic activity is starting to slow down significantly, but just like in 2008 those that are running things don’t want to admit the reality of what we are facing.  Back then, Fed Chair Ben Bernanke insisted that the U.S. economy was not heading into a recession, and we later learned that a recession had already begun when he made that statement.  And as you will see at the end of this article, current Fed Chair Jerome Powell says that he is “very happy” with how the U.S. economy is performing, but he shouldn’t be so thrilled.  Signs of trouble are everywhere, and we just got several more pieces of troubling news.

Thanks to aggressive rate hikes by the Federal Reserve, the average rate on a 30 year mortgage is now up to about 4.8 percent.  Just like in 2008, that is killing the housing market and it has us on the precipice of another real estate meltdown.

And some of the markets that were once the hottest in the entire country are leading the way down.  For example, just check out what is happening in Manhattan…

In the third quarter, the median price for a one-bedroom Manhattan home was $815,000, down 4% from the same period in 2017. The volume of sales fell 12.7%.

Of course things are even worse at the high end of the market.  Some Manhattan townhouses are selling for millions of dollars less than what they were originally listed for.

Sadly, Manhattan is far from alone.  Pending home sales are down all over the nation.  In October, U.S. pending home sales were down 4.6 percent on a year over year basis, and that was the tenth month in a row that we have seen a decline…

Hope was high for a rebound (after new-home-sales slumped), but that was dashed as pending home sales plunged 2.6% MoM in October (well below the expected 0.5% MoM bounce).

Additionally, Pending Home Sales fell 4.6% YoY – the 10th consecutive month of annual declines…

When something happens for 10 months in a row, I think that you can safely say that a trend has started.

Sales of new homes continue to plummet as well.  In fact, we just witnessed a 12 percent year over year decline for sales of new single family houses last month…

Sales of new single-family houses plunged 12% in October, compared to a year ago, to a seasonally adjusted annual rate of 544,000 houses, according to estimates by the Census Bureau and the Department of Housing and Urban Development.

With an inventory of new houses for sale at 336,000 (seasonally adjusted), the supply at the current rate of sales spiked to 7.4 months, from 6.5 months’ supply in September, and from 5.6 months’ supply a year ago.

If all of this sounds eerily similar to 2008, that is because it is eerily similar to what happened just before and during the last financial crisis.

Up until now, at least the economic optimists could point to the employment numbers as a reason for hope, but not anymore.

In fact, initial claims for unemployment benefits have now risen for three weeks in a row…

The number of Americans filing applications for jobless benefits increased to a six-month high last week, which could raise concerns that the labor market could be slowing.

Initial claims for state unemployment benefits rose 10,000 to a seasonally adjusted 234,000 for the week ended Nov. 24, the highest level since the mid-May, the Labor Department said on Thursday. Claims have now risen for three straight weeks.

This is also similar to what we witnessed back in 2008.  Jobless claims started to creep up, and then when the crisis fully erupted there was an avalanche of job losses.

And just like 10 years ago, we are starting to see a lot of big corporations start to announce major layoffs.

General Motors greatly upset President Trump when they announced that they were cutting 14,000 jobs just before the holidays, but GM is far from alone.  For a list of some of the large firms that have just announced layoffs, please see my previous article entitled “U.S. Job Losses Accelerate: Here Are 10 Big Companies That Are Cutting Jobs Or Laying Off Workers”.

A third parallel to 2008 is what is happening to the price of oil.

In 2008, the price of oil shot up to a record high before falling precipitously.

Well, now a similar thing has happened.  Earlier this year the price of oil shot up to $76 a barrel, but this week it slid beneath the all-important $50 barrier…

Oil’s recent slide has shaved more than a third off its price. Crude fell more than 1% Thursday to as low as $49.41 a barrel. The last time oil closed below $50 was in October 4, 2017. By mid morning the price had climbed back to above $51.

Concerns about oversupply have sent oil prices into a virtual freefall: Crude hit a four-year high above $76 a barrel less than two months ago.

When economists are asked why the price of oil is falling, the primary answer they give is because global economic activity is softening.

And that is definitely the case.  In fact, we just learned that economic confidence in the eurozone has declined for the 11th month in a row…

Euro-area economic confidence slipped for an 11th straight month, further damping expectations that the currency bloc will rebound from a sharp growth slowdown and complicating the European Central Bank’s plans to pare back stimulus.

In addition, we just got news that the Swiss and Swedish economies had negative growth in the third quarter.

The economic news is bad across the board, and it appears to be undeniable that a global economic downturn has begun.

But current Fed Chair Jerome Powell insists that he is “very happy about the state of the economy”…

Jerome H. Powell, the Federal Reserve’s chairman, has also taken an optimistic line, declaring in Texas recently that he was “very happy about the state of the economy.”

That is just great.  He can be as happy as he wants, and he can continue raising interest rates as he sticks his head in the sand, but nothing is going to change economic reality.

Every single Fed rate hiking cycle in history has ended in a market crash and/or a recession, and this time won’t be any different.

The Federal Reserve created the “boom” that we witnessed in recent years, but we must also hold them responsible for the “bust” that is about to happen.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

+ More