We Haven’t Seen A Manufacturing Slowdown Like This Since The Last Financial Crisis

This isn’t what was supposed to happen.  According to the economic optimists, there was going to be a great “manufacturing renaissance” as America entered a wonderful new golden age of boundless prosperity.  But of course that is not what has happened.  Manufacturing activity has been declining for the past three months, and all across the country we are seeing economic conditions rapidly deteriorate.  Over and over, we are seeing economic numbers that are worse than anything we have seen since the last recession, but the economic optimists keep assuring us that these are just temporary blips on the way to America’s glorious economic renewal.  Well, they can keep believing in a mirage of future prosperity if they want, but the hard numbers keep telling us another story.  For example, the Chicago Purchasing Managers Index has now fallen to a level that was “last sustained during the financial crisis”

Manufacturing activity across the country has contracted for three months, according to closely watched ISM data. In the Midwest, the slowdown has been more severe. The Chicago Purchasing Managers Index shows backlogs dropping to a level touched briefly four years ago but last sustained during the financial crisis.

In the middle of the country, it already feels like a manufacturing recession for many business owners.  Manufacturing facilities are being closed down, machines are being idled and thousands of workers are being let go.  The following comes from a CNBC article about our current manufacturing slowdown

At Ameri-Source Metals’ machine shop outside Pittsburgh, stacks of graphite stubs have begun to pile up in a quiet corner.

Founder Ajay Goel said the customer who typically buys the stubs – a multinational chemicals company – now only needs one-fourth of the amount he used to produce. As a result, the machines have been idled and the workers who serviced them, laid off.

That sure doesn’t sound like a “booming economy” to me.

So far this year, thousands upon thousands of manufacturing workers have been laid off in the Upper Midwest.  By now, we were supposed to be adding large numbers of these good paying jobs, but instead we are losing them at a frightening pace.

In fact, it is being reported that more than 8,000 manufacturing jobs have been lost in the key state of Pennsylvania alone…

From January to September, the states bordering the Great Lakes have lost more than 25,000 manufacturing jobs: Pennsylvania lost 8,100; Ohio lost 6,000; Michigan lost 6,500; and Wisconsin lost 4,700.

Of course it isn’t just the manufacturing industry where employment is cooling off.  At this point, the number of job openings in the U.S. has fallen to an 18 month low, and it is expected to fall ever further in the months ahead.

Things have already gotten so bad that the mainstream media is running articles about how ordinary Americans can prepare for the coming recession.  For instance, the following comes from a CNN article entitled “What can you do now to financially prepare for a layoff later?”

Sometimes, there are warning signs that you are in danger of being laid off — a buyout of your company, a merger or a strategic change in direction. Other times, the cuts come without warning. But while being laid off is not in your control, being financially prepared for such an event is.

“Companies evolve, change and fail and employees, and even business owners, need to be prepared for the unexpected,” said Mike Silane, a chartered financial analyst with 21 West Wealth Management.

And remember, all of this is happening even though the federal government is running trillion dollar deficits and the Federal Reserve is using up all the ammunition that they should be saving for the depths of the next recession.

In essence, the authorities are already implementing emergency measures in a desperate attempt to support the faltering U.S. economy, but it isn’t working.

This week, we learned that orders for Class-8 trucks in the month of October were down 51 percent from a year ago.

Can anyone explain to me how that is consistent with the “booming economy” narrative that the economic optimists are endlessly pushing?

Unfortunately, the truth is that we can see signs of a major slowdown all around us.  U.S. business hiring has fallen to a 7 year low, the Cass Freight Index has declined for 10 months in a row, and manufacturing is now the smallest share of the United States economy that it has been in 72 years.

But despite all of the evidence that is staring them right in the face, the economic optimists continue to insist that everything is probably going to be okay.  In fact, Goldman Sachs CEO David Solomon is telling us that “the chance of a U.S. recession between now and the election is small”

“I’ve said that I still think the chance of a U.S. recession between now and the election is small — in the distributions of outcomes, it’s a smaller outcome — I said roughly 25%,” Solomon told Bloomberg Television in Berlin on Tuesday. “Nine months ago I probably would have told you it was very small, kind of 15%,” he said. “So I do think the uncertainty has increased a little bit some of the risk,” but economic data and earnings momentum have held up well and American consumers are “still very healthy,” he said.

Of course the truth is that American consumers are actually not “very healthy” at this moment.  Consumer confidence has fallen for 3 months in a row, and 44 percent of all Americans currently do not make enough money to cover their monthly expenses.

That is one of the reasons why consumers are piling up staggering amounts of debt, and that consumer debt bubble is starting to burst.

Unfortunately, the economic optimists will continue to push their false narrative up until the very end, and lots of people will believe them.

You can believe them too if you want, but it won’t change what is about to happen.

The crisis that so many have been anticipating is starting to play out, and our problems are likely to greatly accelerate in the months ahead.

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. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. 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.

More Bad Economic Numbers Put A Huge Dent In The Case Of The Economic Optimists

For a long time, people have been trying to tell me that the U.S. economy is headed for a new golden era.  They insist that the U.S. will be more powerful and more respected than ever before, and that we will see unprecedented prosperity in this nation.  But despite extremely wild spending by the U.S. government and exceedingly irresponsible intervention by the Federal Reserve, the U.S. economy has not even had a “good” year in ages.  As I have pointed out numerous times, we have not had a year when U.S. GDP grew by at least 3 percent since the middle of the Bush administration, and that makes this the longest stretch of low growth in all of U.S. history by a very wide margin.  Many believe that brighter days may still be ahead, but all of the economic numbers that we have been getting in recent months make it abundantly clear that a new economic slowdown has begun.  I shared 14 of those numbers earlier this week, and I will share some brand new ones with you today.

Let’s start by taking a look at how U.S. consumers are faring.  U.S. consumer confidence has now fallen for 3 months in a row, and this week we learned that the Bloomberg Consumer Comfort Index has just fallen at the fastest pace in more than 8 years

U.S. consumer comfort suffered its biggest weekly decline in more than eight years on a pullback in Americans’ assessments of the economy, personal finances and the buying climate, possibly signaling more moderate household spending approaching the holiday-shopping season.

The Bloomberg Consumer Comfort Index fell 2.4 points, the most since March 2011, to 61 in the week ended Oct. 27.

How in the world can anyone possibly claim that we have a “booming economy” after reading that?

We also just got another depressingly bad manufacturing number.  Experts were expecting a reading of 48.3 for the Chicago Purchasing Management Index, but instead it came in at just 43.2

The Chicago Purchasing Management Index sank to 43.2 in October from 47.1 in the prior month. This is the lowest level since December 2015. Economists has expected a reading of 48.3, according to Econoday.

Any reading below 50 indicates deteriorating conditions.

We were promised a “manufacturing renaissance”, but instead manufacturing is now the smallest share of the U.S. economy that it has been in 72 years.

That is terrible.

Manufacturing traditionally provides good paying jobs, and as I pointed out the other day, U.S. business hiring has now declined to the lowest level in 7 years.

But at least we have plenty of government jobs, eh?

In the private sector, things are getting really tough, and we are starting to see lots of big companies lay off workers.

For example, Molson Coors just announced that they will be laying off up to 500 workers as they desperately search for a way to survive in this difficult economic environment…

To further drive efficiency and enable growth, Molson Coors is consolidating and reorganizing office locations. The Denver office will be closed and Chicago will be designated as the North American operational headquarters. Functional support roles currently housed in several offices around the country will now be based in Milwaukee, Wisconsin.

As a result, we expect to reduce employment levels by approximately 400 to 500 employees as part of this restructuring, primarily in our existing United States, Canada and International reporting segments, as well as Corporate.

You know that things are getting tough when even beer companies start laying people off.

Of course the “retail apocalypse” continues to escalate, and we just learned that Forever 21 will be closing most of their stores and laying off most of their employees

More than 100 Forever 21 stores are slated to close as part of the fashion retailer’s Chapter 11 bankruptcy protection case, according to court documents filed this week.

The family-owned company, which has about 32,800 employees, said it would close “most” of its stores in Asia and Europe and up to 178 stores in the U.S. when it filed for protection Sept. 29.

A similar scenario is playing out for Dressbarn.  According to USA Today, all of their 544 stores “will close no later than Dec. 26″…

Liquidation sales at the remaining Dressbarn stores will start Friday, the struggling retailer announced Wednesday.

While the 544 stores will close no later than Dec. 26, the women’s clothing website is expected to relaunch in 2020 with a new owner, the company said in a news release.

It has been hoped that a limited trade agreement with China might bolster the economy at least temporarily, but now we are learning that Chinese officials expect “phase one” of the deal to “soon fall apart”.  According to CNN, the Chinese are pessimistic that our two countries will ever be able to “reach a full trade deal”…

Chinese officials have expressed doubts about whether the world’s two largest economies can reach a full trade deal, Bloomberg reported. That is casting a long shadow over the “phase one” agreement that the countries reached earlier in October.

This is consistent with my warnings from previous articles.  The Chinese wanted the Trump administration to stop the implementation of any more tariffs, and they were able to achieve that with “phase one”.  But in order to move forward with “phase two”, the Chinese are going to insist on the removal of all tariffs

According to BBG’s sources, this is the bare minimum that Beijing would accept to move ahead with Phase 1: a commitment from the Americans to removing tariffs in Phase 2, and agreeing to cancel the next round of tariffs, set to take effect in December.

This is something that the Trump administration will never agree to, and so that puts us back where we originally started.

The Chinese will continue to “negotiate”, but only for stalling purposes.

There is only about a year left until the 2020 elections, and the Chinese are hoping to run out the clock on the Trump administration with as little disruption to their own economy as possible.

Unfortunately for the Chinese, Trump could possibly win another term, and if either Elizabeth Warren or Bernie Sanders win they could potentially be even tougher on trade with China.

In any event, we should not expect a comprehensive trade deal with China any time soon, and that is really bad news for the economic optimists.

Of course the truth is that everything that I have just shared is bad news for all of us.  The U.S. economy is seriously deteriorating, and things are only going to get worse in the months ahead.

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 can only allow this to happen if this “About the Author” section is included 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.  This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate.  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.

The Boom Turns Into A Bust – Here are 14 Signs That The U.S. Economy Is Steadily Weakening

There should no longer be any doubt that the U.S. economy is slowing down, but most Americans still don’t realize what is happening because the major news networks are completely focused on the endless impeachment drama that is currently playing out in Washington.  And without a doubt that is important, because it threatens to literally rip our entire nation in two.  But meanwhile, economic activity has taken a very ominous turn.  Hiring is slowing, consumer confidence is plunging, defaults on auto loans are rapidly escalating, the “transportation recession” continues to get deeper and it appears that the housing bubble is popping.  Everywhere we turn, there are signs of economic trouble, and many are deeply concerned about what this will mean for us as we head into a pivotal election year in 2020.

Not since the last recession have we seen numbers this bad.  The “mini-boom” that we witnessed for several years has now turned into a “bust”, and very tough times are ahead.

The following are 14 signs that the U.S. economy is steadily weakening…

#1 U.S. business hiring has fallen to a 7 year low.

#2 Consumer confidence in the United States has now declined for 3 months in a row.

#3 Defaults on “subprime” auto loans are happening at the fastest pace that we have seen since 2008.

#4 The percentage of “subprime” auto loans that are at least 60 days delinquent is now higher than it was at any point during the last recession.

#5 Vacancies at U.S. shopping malls have hit the highest level since the last recession.

#6 Destination Maternity has announced that they will be closing 183 stores as the worst year for store closings in U.S. history just continues to get worse.

#7 The Cass Freight Index has now fallen for 10 months in a row.

#8 U.S. rail carload volumes have plunged to the lowest level in 3 years.

#9 In September, orders for class 8 heavy duty trucks were down 71 percent.

#10 Tesla’s U.S. sales were down a whopping 39 percent during the third quarter of 2019.

#11 The bad news just keeps rolling in for the real estate industry.  Last month, existing home sales in the United States declined by another 2.2 percent.

#12 New home prices have fallen to the lowest level in almost 3 years.

#13 According to one recent report, 44 percent of all Americans don’t make enough money to cover their monthly expenses.

#14 A recent survey found that more than two-thirds of all U.S. households “are preparing for a possible recession”.

All over the country, economic activity is slowing down, and this is hitting many small businesses particularly hard.

In Wisconsin, one aluminum firm “has seen bookings plunge by 40 percent” and was forced to lay off workers as a result…

Sachin Shivaram, the chief executive of Wisconsin Aluminum Foundry, started to worry this summer when orders for his brake housings and conveyor belt motors first grew scarce. Within weeks, what began as mild concern snowballed into a business drought that has seen bookings plunge by 40 percent.

In August, Shivaram, 38, reluctantly laid off two dozen workers, hoping to recall them when the outlook improved. It hasn’t.

“Things are not good. We didn’t anticipate this level of deterioration,” he said. “Orders are down across the board.”

Of course there are hundreds of other examples just like this one.

As times get tougher, many U.S. consumers are increasingly turning to debt to help make ends meet.

For those at the low end of the economic food chain, getting approved for credit cards and other conventional forms of debt can be quite difficult.  This has opened up a door for online financial predators, and they are making a killing by making loans to people that really can’t afford them.

In fact, it is being reported that online lending has become a $50 billion industry, and sometimes these “loans” carry annual interest rates of more than 100 percent

It’s called the online installment loan, a form of debt with much longer maturities but often the same sort of crippling, triple-digit interest rates. If the payday loan’s target audience is the nation’s poor, then the installment loan is geared to all those working-class Americans who have seen their wages stagnate and unpaid bills pile up in the years since the Great Recession.

In just a span of five years, online installment loans have gone from being a relatively niche offering to a red-hot industry. Non-prime borrowers now collectively owe about $50 billion on installment products, according to credit reporting firm TransUnion. In the process, they’re helping transform the way that a large swathe of the country accesses debt. And they have done so without attracting the kind of public and regulatory backlash that hounded the payday loan.

Just like the “payday loan” industry flourished during the last recession, now predatory lending is flourishing during this present era.

Unfortunately, as “the everything bubble” bursts, times are going to be very tough for all of us during the years ahead.

I think that Michael Pento of Pento Portfolio Strategies summed things up very well when he made the following statement during a recent interview…

‘When this thing implodes, we are all screwed. On a global scale, we have never before created such a magnificent bubble. These central bankers are clueless, and they have proven that beyond a doubt. All they can do is to try to keep the bubble going.’

We should give the central bankers credit for keeping the bubble going for as long as it has.  It should have never lasted this long, but thanks to unprecedented intervention they have been able to keep it alive.

But no financial bubble lasts forever, and now things have started to shift in a major way.

2020 is rapidly approaching, and the time of “the perfect storm” is now upon us.

I encourage you to do what you need to do to weather the coming economic storm, because it is not going to be pleasant.

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 can only allow this to happen if this “About the Author” section is included 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.  This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate.  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.

They Are Telling Us That The Next Recession “Won’t Be As Bad As 2008”. They Are Wrong.

Are we really supposed to believe them?  As the next recession rapidly approaches, the mainstream media is assuring us that there isn’t really that much to be concerned about.  In fact, as you will see below, CNN is assuring us that “the next one won’t be as bad as 2008”.  But how do they know?  After all, we didn’t have a president that was in danger of being impeached in 2008.  As this impeachment process moves forward, the mood of this nation is going to become increasingly sour.  Over in Europe, they are dealing with endless Brexit drama, and over in China the Hong Kong protests have created instability unlike anything we have seen in the modern history of that country.  Meanwhile, the Middle East has become an endless source of “wars and rumors of wars”.  At some point missiles will start flying back and forth and a major war will erupt over there, and that will immediately throw the entire global economy into chaos.  On top of everything else, our planet is shaking like a leaf, global weather patterns are becoming increasingly unstable and crops are failing all over the world.  The truth is that the environment that the global economy operates within is far more unstable today than it was back in 2008, and it wouldn’t take much at all to push us into a complete and utter economic nightmare.

But if you listen to the mainstream media, you would be tempted to assume that everything is going to be just fine.

In fact, CNN just published an article entitled “Not all recessions are a crisis, and the next one won’t be as bad as 2008”

Recession fears are on the rise in the United States. Memories of the last downturn are exacerbating these worries: The last time America faced a recession was in 2008, as the financial crisis was unfolding. Millions of people lost their jobs, GDP growth plummeted and businesses shut down.

But not all recessions are like that. Sometimes the economy can grow all the way through a recession. In fact, some economists believe the world is in a recession now and most people don’t even realize it.

Wouldn’t it be great if we could go all the way through the next recession without even realizing it?

I would love that.

Perhaps they should invent a way for us to eat Brussels sprouts without realizing it as well.

According to CNN, it is likely that we are headed for a “growth recession” rather than a recession in which we would have “millions of lost jobs like the last recession”…

For the United States, a global growth recession will probably mean sluggish growth, rather than millions of lost jobs like the last recession 10 years ago did. A growth recession would be nothing like 2008, when America entered a so-called technical recession: at least two consecutive quarters of a shrinking economy. The US economy is far away from that.

They can be optimistic if they want, but the thing about sticking your head in the sand is that your rear end is still exposed.

Look, I am not opposed to wishful thinking, but at some point you have to deal with reality.  Personally, I would like to be able to dunk a basketball like Michael Jordan does, but it just isn’t going to happen.

And our reality is telling us that we are far more vulnerable economically today than we were back in 2008.  Even though we have never had a full year of 3 percent economic growth since the last recession, the Dow Jones Industrial Average is nearly twice as high as it was at the peak of the bubble that burst during the last financial crisis.

In other words, stock prices are absurdly overinflated, and at some point there is going to be a dramatic implosion.

Much of the growth in stock prices has been driven by companies that are supposedly worth billions of dollars but that don’t actually make any profits.

WeWork is an example of the type of company that I am talking about.  It is constantly hemorrhaging money, but back in January it was supposedly worth 47 billion dollars.

Of course that number was always completely and utterly ridiculous, and after all the trouble that the company has had in recent months the valuation of the company has changed dramatically.

In fact, at this point it is being reported that WeWork is only worth about 8 billion dollars

As WeWork runs out of money, SoftBank Group is orchestrating the company’s “rescue financing plan” that could value it below $8 billion, Bloomberg reports.

Why it matters: $8 billion is a slim fraction of the $47 billion valuation WeWork gleaned in January from SoftBank. The rescue plan also comes after the office-sharing business slammed the brakes on its IPO, causing company bonds to tumble.

So how does a company lose 39 billion dollars in value in less than a year?

Well, it was never actually worth 47 billion dollars in the first place, and the truth is that WeWork is eventually going to zero.

But similar things could be said about company after company.  Wall Street has become a theater for the absurd, and eventually this whole freak show is going to implode in spectacular fashion.

And so what happens if a historic stock market crash is one of the triggers that plunges us into an extended economic depression like we experienced in the 1930s?

Our society is not equipped to handle something like that.  We are soft, lazy, self-obsessed and completely dependent on the system.  If we had to suddenly become a lot more self-sufficient, most of us would fall flat on our faces.

Earlier today, I came across a Time Magazine article which explained that 71 percent of all 17-to-24-year-olds in the United States do not even meet the most basic qualifications for military service…

Approximately 71% of the 34 million 17-to-24-year-olds in the U.S. would not qualify for military service because of reasons related to health, physical appearance and educational background, according to the Pentagon.

The ineligible typically includes those who are obese, those who lack a high school diploma or a GED, convicted felons, those taking prescription drugs for ADHD and those with certain tattoos and ear gauges, the Wall Street Journal reports, though some requirements can be waived.

Only 1% of young people are both “eligible and inclined to have conversation with” the military about possible service, according to the Defense Department.

This is just one example of how badly our society has declined.

There are thousands more, and I write about them all the time.

So we better hope that things don’t get really, really bad in this country, because it would be a colossal mess unlike anything the world has ever seen before.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep.  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 in written form on their own websites, but only if this “About the Author” section is included.  In order to comply with 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.  This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate.  You can follow me on social media on Facebook and Twitter.  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 this website.

69 Percent Of U.S. Households “Are Preparing For A Possible Recession”

Do you believe that a recession is coming?  If so, you certainly have a lot of company.  It turns out that more than two-thirds of all U.S. households “are preparing for a possible recession” right now.  There is a growing national consensus that that U.S. economy is heading for big trouble, and this is causing a lot of people to cut back on spending.  In fact, we just witnessed the first drop in retail sales in seven months.  If this slowdown in retail spending extends into the holiday season, that could potentially be absolutely disastrous for the entire retail industry.  We are already in the midst of the worst “retail apocalypse” in U.S. history, and we are learning of more store closings with each passing day.  But of course it isn’t just the retail industry that is in very serious trouble, and I have some brand new numbers from a couple of other sectors that I will share with you below.

But first let’s talk about this new survey that just came out that says that 69 percent of all U.S. households “are preparing for a possible recession”

More than two-thirds of U.S. households say they are preparing for a possible recession.

Some 69% of participants in a recent poll said they were taking steps to shore up their finances ahead of a possible downturn, including 44% who said they were spending less money. Some 10%, including 13% of college graduates, are looking for a better or more stable job.

Considering what I do, it makes perfect sense to me that more than two-thirds of the country would be preparing for a recession.

But it would be very interesting to see this number broken down by political affiliation.  In general, Democrats tend to be far more pessimistic about the economy than Republicans are right now, and that is just because Donald Trump is in the White House.

I would suspect that the percentage of Trump supporters that are “preparing for a possible recession” would be well under 50 percent, but that is just a guess on my part.

In any event, the truth is that 100 percent of Americans should be preparing for a recession, because the warning signs are all around us.

And on Wednesday another economic red flag emerged.  For months, the economic optimists have been touting “the strength of the consumer” as one of the bright spots for the economy, but last month retail sales dropped for the first time in seven months

U.S. retail sales fell for the first time in seven months in September, raising fears that a slowdown in the American manufacturing sector could be starting to bleed into the consumer side of the economy.

The Commerce Department said Wednesday that retail sales dropped 0.3% last month as households slashed spending on building materials, online purchases and especially automobiles.

That is certainly not the end of the world, but it does indicate that consumers are starting to scale back their spending.

Of course that is the last thing that retailers want to see happen.  We are already on pace to absolutely shatter the all-time record for store closings in a single year, and we just learned that Sears and Kmart will soon be closing more stores

Sears and Kmart store closings are expected to continue into early 2020.

While more than 100 Sears and Kmart stores will shutter in the coming months, additional closures will stretch into January.

Company officials did not release an official list of the locations that will close. But news outlets across the nation, as well as documents filed with state governments, show some of the closings will happen in January 2020.

Sears has essentially been in the process of liquidating for a very long time, and we can only hope that eventually this incredibly painful liquidation will mercifully come to an end.

For many other retailers, this holiday season will be a “make or break moment”, and we should probably expect another huge wave of store closing announcements early in 2020.

And as I noted above, it isn’t just the retail industry that is really struggling.  We are already in a “transportation recession”, and we just learned that the Cass Freight Index has now declined for ten months in a row.  The following comes from Wolf Richter

Freight shipments by all modes of transportation – truck, rail, air, and barge – within the US fell 3.4% in September 2019, compared to September last year, according to the Cass Freight Index for Shipments. For the index – which tracks shipment volume of consumer and industrial goods but not of bulk commodities – it was the 10th month in a row of relentless year-over-year declines

Another sector that is facing very tough times is the auto industry, and according to Reuters over 7 million Americans are seriously delinquent on their auto loans…

More than 7 million Americans are already 90 or more days behind on their car loans, according to the New York Federal Reserve, and serious delinquency rates among borrowers with the lowest credit scores have by far seen the fastest acceleration.

If all these numbers remind you of the last recession, that would make perfect sense, because we haven’t seen anything like this in more than a decade.

And all of this is happening even though the federal government is adding a trillion dollars to the national debt each year and the Federal Reserve has begun flooding the financial system with fresh cash.

In terms of “economic stimulus”, our leaders are already pushing the accelerator all the way to the floor, and it is simply not working.

This truly is the beginning of the end (#ad) for the U.S. economy, and most Americans can now see that very tough times are ahead.

But what most Americans don’t understand is that what we will be facing won’t be anything like 2008.

Instead, it will be much, much worse.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep.  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 in written form on their own websites as long as this “About the Author” section is included.  In order to comply with 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.  This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate.  You can follow me on social media on Facebook and Twitter.  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 this website.

 

When It Comes To The U.S. Economy, Everyone Wants To Pin The Credit Or The Blame On Donald Trump

No matter what happens with the U.S. economy, most of the credit or the blame is going to go to President Trump.  And now that the U.S. economy appears to be headed for big trouble, the mainstream media is salivating over what this could mean for Trump’s chances of winning in 2020.  Within the past few days, the New York Times, the Washington Post, CNN, MSNBC and Fox News have all run stories about Trump and the economy, and they are all perpetuating the false premise that presidents should be held accountable for how the economy performs.  As I have repeatedly reminded my readers, the truth is that U.S. presidents generally have relatively little control over the direction of the economy.  In our system, it is the central planners at the Federal Reserve that primarily direct our economy, and so most of the credit or the blame for our economic performance should go to them.  And the truth is that even President Trump realizes this.  He understands that the Federal Reserve has control over key economic tools that he does not, and that is one of the reasons why he is so frustrated right now.  The Fed is not running things the way that he would run them, and he realizes that this could severely hurt his chances of winning the next election.

During his first term, President Trump has not actually been able to do much to alter the overall trajectory of the economy.  Some pundits point to the tax cuts that he was able to pass, and certainly reducing corporate tax rates helped things a little bit in the short-term, but the overall impact of the tax bill was relatively negligible.  Ultimately, the moves that the Federal Reserve has been making have been far more important, and at this point Trump seems to be convinced that Fed Chair Jerome Powell and others are intentionally trying to undermine him

He has insisted that his own handpicked Federal Reserve chair, Jerome H. Powell, is intentionally acting against him. He has said other countries, including allies, are working to hurt American economic interests. And he has accused the news media of trying to create a recession.

“The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election,” Mr. Trump tweeted last week. “The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China!”

Trade policy is one area where presidents do have more power than anyone else, and this is definitely where President Trump has had the biggest impact on the economy.  After claiming for months that a trade war would be “easy” to win, President Trump is now acknowledging that our trade war with China could potentially result in a recession

“I am doing this whether it’s good or bad for your statement about, ‘Oh, will we fall into a recession for two months?’ The fact is, somebody had to take China on,” Trump said.

“Whether it’s good for our country or bad for our country, short term, it had to be done,” he said, repeating that “whether it’s good or bad, short term, is irrelevant.”

And to be honest, this is the argument that Trump should have been making all along.  A trade conflict with China is most definitely going to be very painful, but it is also very true that something had to be done about China.  They have been taking advantage of us and ripping us off for years, and when previous administrations decided to do nothing about China they were being exceedingly negligent.

However, there is a huge difference between recalibrating our relationship with China and antagonizing them so much that our relationship with the Chinese is completely destroyed.  At this point it appears that we are doing the latter, and that is going to have enormous implications in 2020 and beyond.

And if our trade war with China does push us into a recession, there are many on the left that would greatly rejoice.  The following comes from a Fox News editorial by Steve Hilton

It’s pretty obvious that these establishment Trump-hating hysterics — all of them, of course, living comfortable coastal lives — actually want a recession because they think that’s the best way to get rid of Trump. At least one of them is honest about it.

“I’ve been saying for about two years  — that I hope we have a recession, and people get mad at me,” said Bill Maher, host of HBO’s “Real Time with Bill Maher.”

Unfortunately for Trump, most Americans will squarely blame him if a recession happens even if it wasn’t his fault.  When the U.S. economy was doing relatively well, Trump repeatedly took full credit for it, and that was a huge mistake.  Because if the economy is really struggling in 2020, he probably won’t be able to successfully shift the blame to someone else.  The mainstream media will hammer him over and over again with editorials about “the failure of Trumponomics”, and even though most of those editorials won’t make any sense, they will still have a huge impact on millions of Americans voters.

It is often said that “pride goeth before destruction”, and President Trump has repeatedly told us that this is the greatest economy ever and that he is responsible for it.  But of course this isn’t even close to the greatest economy ever.  The following comes from another Fox News editorial

The fact is Trump’s best economic growth is 3.5 percent in two quarters out of the 10 quarters he’s been in office, CNBC’s John Harwood reports, adding that same growth figure, 3.5 percent, is Obama’s seventh best quarter, George W. Bush’s eighth best, and Bill Clinton’s 17th best. Yet, Trump claims his economy is the best ever. Far from it.

When things were going relatively well, President Trump should have said that it was a team effort and he should have acknowledged that we still had an enormous amount of work to do.

And all along he should have been educating the American people about the fact that the Federal Reserve has far more power over the performance of the economy than he does.

But now it appears that we are facing a nightmare economic scenario, and everybody is going to blame him for the failure of the economy.

Meanwhile, the Federal Reserve will once again escape accountability for running our economy into the ground, and that is extremely unfortunate.

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.

Evidence That The U.S. Economy Could Be Plunging Into A Very Deep Recession Is Rapidly Mounting

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
  • PMIs
  • 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.

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.

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