Recession 2017? Things Are Happening That Usually Never Happen
Is the U.S. economy about to get slammed by a major recession? According to Gallup, U.S. economic confidence has soared to the highest level ever recorded, but meanwhile a whole host of key economic indicators are absolutely screaming that a new recession is beginning. And if the U.S. economy does officially enter recession territory in 2017, it certainly won’t be a shock, because the truth is that we are well overdue for one. Donald Trump has inherited quite an economic mess from Barack Obama, and it was probably inevitable that we were headed for a significant economic downturn no matter who won the election.
One of the key indicators to watch is average weekly hours. When the economy shifts into recession mode, employers tend to start cutting back hours, and that is happening right now. In fact, as Graham Summers has pointed out, we just witnessed the largest percentage decline in average weekly hours since the recession of 2008…
In addition to the decline in hours, Summers has suggested that there are a number of other reasons to believe that a new recession is here…
The fact is that the GDP growth of 4%-5% is not just around the corner. The US most likely slid into recession in the last three months. GDP growth collapsed in 4Q16, with a large portion of the “growth” coming from accounting gimmicks.
Consider the following:
- Tax receipts indicate the US is in recession.
- Gross private domestic investment indicates were are in a recession.
- Retailers are showing that the US consumer is tapped out (see AMZN’s recent miss).
- UPS, another economic bellweather, dramatically lowered 2017 forecasts.
- To me, even more alarming is the tightening of lending standards. In our debt-based economy, the flow of credit is absolutely critical to economic growth, and when credit starts to get tight that almost always leads to a recession.So the fact that lending standards have now tightened for medium and large sized firms for six quarters in a row is very bad news. The following comes from Business Insider…
- Although modest over the past couple of quarters, it is still worth noting that this is now the sixth quarter in succession that standards have tightened for large and medium sized firms,” Deutsche Bank economist Jim Reid wrote in a research note to clients.“This usually only happens in recessions.”
- Read More : theeconomiccollapseblog