“The housing market is out of control, the rates are increasing and people cannot afford, the real estate market is on the brink of disaster.
As the economy enters a depression, Janet Yellen is right on schedule letting everyone know that the economy is doing great.
The [DS] is ready to take Biden out of the game, they are preparing a change of batter. Trump calls for the 25th Amendment once again. Lets see if the D’s react.
Obama and the Clintons are coming into focus, Clintons have set up their initiative in Ukraine, timing is everything.
The [DS]/fake news begin the narrative for riots and chaos. War is approaching and building. The patriots have the [DS] exactly where then need to be so the world can watch.” – Dave, X22 Report
- Economists have practically sounded the all-clear on a looming recession, but plenty of signs are still flashing red.
- 1. An “uncertain outlook” from leading indicators
- Many mainstay economic indicators measure the past. So-called leading indicators reflect what likely lies ahead.
2. Consumer confidence is just a hair above recessionary levels
- The Conference Board’s consumer confidence index came in at 80.2 in August, hovering just above 80, the level that often signals the U.S. economy is headed for a recession in the coming year.
- It is also a leading indicator used to predict consumer spending, which drives more than two-thirds of U.S. economic activity.
3. Consumers are foregoing big-ticket purchases
- Retailers report that their customers have shifted their purchasing habits, spending less on furniture and other big ticket items in favor of necessities. They have also been trading down on grocery items, ditching pricier cuts of beef and buying chicken.
“We saw some switch even to some canned products, like canned chicken and canned tuna and things like that,” Costco’s Chief Financial Officer Richard Galanti told analysts on a May conference call.
4. Credit cards are getting maxed out
- U.S. consumers ran up their credit card debt past the $1 trillion mark for the first time last month, according to a report on household debt from the Federal Reserve Bank of New York.
5. Banks are increasingly reluctant to lend
- The latest Senior Loan Officer Opinion Survey by the Federal Reserve reports tightening credit conditions across the board, from business loans to home mortgages and consumer credit.
“Regarding banks’ outlook for the second half of 2023, banks reported expecting to further tighten standards on all loan categories,” the Fed survey concluded.
“Banks most frequently cited a less favorable or more uncertain economic outlook and expected deterioration in collateral values and the credit quality of loans as reasons for expecting to tighten lending standards further.”
6. Corporate bonds are maturing and refinancing them will be costly
- Goldman Sachs estimates that $1.8 trillion in corporate debt is coming due over the next two years and it will have to be refinanced at higher interest rates.
- The expense will eat up more corporate resources, possibly leading to slower growth and investment.
- Recessions occur as debt levels peak and borrowers begin to default.
7. Manufacturing remains in a prolonged post-pandemic slump
- Manufacturing has been in decline for 10 consecutive months, as measured by the ISM Manufacturing Purchasing Managers Index.
Respondents to the ISM survey reported weaker customer demand because of higher prices and interest rates.
“Orders are in fact falling faster than factories are cutting output, suggesting firms will need to continue scaling back their production volumes into the near future,” writes Chris Williamson, chief business economist at S&P Global Market Intelligence.
“An increasing sense of gloom about the near-term outlook has meanwhile hit hiring and led to a further major pull-back in purchasing activity.”
8. ‘Cascading crises’ could tip the balance of a slowing global economy
- China, a growth engine for the past 40 years, is still struggling to recover from the pandemic, global economic growth has fallen below long-term average, and the ailing world could pull the U.S. economy down with it.
10. Inflation is sticky, and the Fed isn’t done
- The soft landing scenario that is so widely embraced is based on observations that inflation has dropped precipitously as the economy continues to grow at a healthy pace and the labor market is still holding strong with the unemployment rate at 3.8%.
- The Fed, which has raised interest rates 11 times since March 2022 to curb inflation, can now take a bow. The consumer price index, which measures inflation, has come down from a peak of over 9% in June 2022 to 3.2% on its last reading in July.
- The latest reading on CPI, for August, came out Wednesday, and re-accelerated more than expected, with The Fed’s most-watched ‘Core Services CPI Ex-Shelter’ back above 4.00%…
Catch tonight’s X22 Report here: