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Signs of economic depression in America – data will show payrolls fell sharply, factories slowed and consumers are imploding
It was interesting to see ads in the TV where the restaurant chains announce cut in entrée prices. They are the one who faces the recession first. This is nothing new.
American economy is fast decelerating into an economic depression. Official figures do not tell the truth. These data are lagging behind the main streets by at least six months.
This week’s data will confirm a recession is in the making. . The American employers have cut jobs in June for a sixth consecutive month, while manufacturing contracted at a faster pace, signaling the expansion is still at risk.
According market expectation payrolls shrank by 80,000 workers. The unemployment rate wills some slight improvement after deteriorating largely last month.
Chicago PM Index has dropped by a point to 48 from 49.1. Anything below 50 in this index indicates a recession.
The unemployment initial claims data is gradually moving up to that magic reversionary number of 400K. For now it hovers around 384 to 385K.
The ISM non-manufacturing index will also drop to below 51 from 51.7. The service index was the single bright spot. But this one is also giving up slowly and steadily.
The stock market is signaling a major recession. If Dow Jones Industrial Average falls below 7,000 it will officially signal a depression in the next six to nine months.
American consumers contribute 70% to growth of the economy. With excessive debt burden, exploding oil prices and skyrocketing food prices, the consumer is helpless.
If consumers continue to implode, a deep recession and most likely a decade long nasty depression and deflation will dominate the US economy.
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