Skip to comments.12 Clear Signals That The U.S. Economy Is About To Really Slow Down
Posted on 06/12/2013 11:45:57 AM PDT by lbryce
A lot of things that have not happened since the last recession are starting to happen again. As you read the list below, you will notice that the year "2009" comes up again and again. There is a reason for that. Many of the same patterns that we witnessed during the last major economic downturn are starting to repeat themselves. In fact, many of the things that are happening right now have not happened in quite a few years. For example, manufacturing activity in the U.S. has contracted for the first time in four years. The inventory to sales ratio is the highest that it has been in four years. Average hourly compensation just experienced the largest decline that we have seen in four years. We also just witnessed the largest decline in the number of mortgage applications that we have seen in four years. After everything that Barack Obama, the U.S. Congress and the Federal Reserve have tried to do, there has been no real economic recovery and now the U.S. economy is suddenly behaving as if it is 2009 all over again. A whole host of recent surveys indicate that the American people are starting to feel a bit better about the economy, but the underlying economic numbers tell an entirely different story. The following are 12 clear signals that the U.S. economy is about to really slow down...
#1 The average interest rate on a 30 year mortgage has risen above 4 percent for the first time in more than a year.
#2 The decline in the number of mortgage applications last week was the largest drop that we have seen since June 2009.
#3 Mark Hanson is reporting that "mass layoffs" have occurred at three large mortgage institutions...
This morning I was made aware that three large private mortgage bankers I follow closely for trends in mortgage finance ALL had mass layoffs last Friday and yesterday to the tune of 25% to 50% of their operations staff (intake, processing, underwriting, document drawing, funding, post-closing).
This obviously means that my reports of refi apps being down 65% to 90% in the past 3 weeks are far more accurate than the lagging MBA index, which is likely on its' way to print multi-year lows in the next month.
#4 It was just announced that average hourly compensation in the United States experienced its largest drop since 2009 during the first quarter of 2013.
#5 As I wrote about the other day, the Institute for Supply Management manufacturing index declined to 49.0 in May. Any reading below 50 indicates contraction. That was the first contraction in manufacturing activity in the U.S. that we have seen since 2009.
#6 The inventory to sales ratio has hit a level not seen since 2009. That means that there is a lot of inventory sitting out there that people are not buying.
#7 According to the Commerce Department, the demand for computers dropped by a stunning 9 percent during the month of April.
#8 As I noted in a previous article, corporate revenues are falling at Wal-Mart, Proctor and Gamble, Starbucks, AT&T, Safeway, American Express and IBM.
#9 Job growth at small businesses is now at about half the level it was at the beginning of the year.
#10 The stock market is starting to understand that all of these numbers indicate that the U.S. economy is really starting to slow down. The Dow was down 216.95 points on Wednesday, and it dropped below 15,000 for the first time since May 6th.
#11 The S&P 500 has now fallen more than 4 percent since May 22nd. Is this the beginning of a market "correction", or is this something much bigger than that?
#12 Japanese stocks are now down about 17 percent from the peak of May 22nd. Japan has the third largest economy on the planet and it is one of the most important trading partners for the United States. A major financial crisis in Japan would have very serious implications for the U.S. economy.
If we were going to have an "economic recovery", it should have happened in 2010, 2011 and 2012. Unfortunately, as a recent Los Angeles Times article detailed, an economic recovery never materialized...
Real GDP growth the value of goods and services produced after adjusting for inflation is 15.4% below the 3% growth trend of past recoveries, wrote Edward Leamer, director of the UCLA Anderson Forecast. More robust growth will be necessary to bring this recovery in line with previous ones.
"It's not a recovery," he wrote. "It's not even normal growth. It's bad."
Now we are rapidly approaching another major economic downturn.
But poverty in America has continued to experience explosive growth since the end of the last recession and dependence on the federal government is already at an all-time high.
How much worse can things get?
Sadly, they are going to get much, much worse.
What the U.S. economy is experiencing right now is not just a cyclical downturn. Rather, we are in the midst of a long-term economic decline that is the result of decades of very foolish decisions by our leaders.
It is imperative that we get the American people educated about what is happening. If people do not understand what is happening, they are not going to get prepared for the hard years that are coming.
If you have a family member or a friend that does not understand the long-term economic collapse that is unfolding all around us, please show them my article entitled "40 Statistics About The Fall Of The U.S. Economy That Are Almost Too Crazy To Believe". It goes a good job of pointing out many of the reasons why we are heading for complete and total economic disaster.
And the point is not to fill people with fear. Rather, there is a lot of hope in understanding what is happening and in getting prepared. As we have seen over in Europe, those that get blindsided by economic problems often become totally consumed with despair. Suicide rates have soared in economically-troubled nations such as Greece, Spain and Italy.
And the same thing is going to happen in the United States too. In fact, the suicide rate in the United States has already been rising according to the New York Times...
From 1999 to 2010, the suicide rate among Americans ages 35 to 64 rose by nearly 30 percent, to 17.6 deaths per 100,000 people, up from 13.7.
In fact, today more Americans are killed by suicide than by car accidents.
Isn't that crazy?
Unfortunately, this is only just the beginning. When the system fails, millions of Americans are going to be convinced that their lives are over. A lot of them are going to do some very stupid things. We want to try to prevent as much of that as possible.
Thanks to decades of incredibly foolish decisions by our leaders, an economic collapse is inevitable. This is especially true considering the fact that our leaders in Washington D.C. and elsewhere will not even consider many of the potential solutions which could help start turning our economic problems around.
So since there are no solutions on the horizon, we need to explain to people what is happening and help them to get as prepared as possible.
The years ahead are going to be very hard, but we have a choice as to how we will respond to the challenges in front of us.
We can face those challenges with fear, or we can face them with courage.
Glad America didn’t elect a successful businessman on November 6, 2012.
Nope, kept right on going down that prior road.
Prepare as best you can, folks.
I hear they have just the thing to fix this. Obamacare AND legalizing millions of lawbreakers. WHAT could possibly go wrong?
And a lot of freepers pouted and stayed home
..but at least the ‘War on Women’ is over.
And you don’t hear anybody bragging about that now.
Nothing but crickets.
Financial gimmickry has never led to prosperity. Obama has borrowed and spent over 46trillion dollars squandering huge mounts of capital. Bernacke has printed trillions more in greenbacks. Neither action has created real wealth and is hollowing out the economy. Real economic growth has been stalled or actually reversed by Obama’s bizarre left wing ideologues at EPA, Dept. of Energy and throughout the federal bureaucracy. Endless rules, regulations, and fees have hindered entrepreneurship, business and capitalism which creates the real wealth necessary for social justice. Obama and Bernacke will go down in history as the worst men ever to hold high public office. It will take more than a generation to recover from the harm these two men are doing.
Hey, but the good news is that gas prices are WAY up!
If this were a Republican Administration the misery index would be on every news cast and on the front pages.
Maybe it's wise that the government is buying up all the ammunition.
I voted for what’s his name? Oh yeah, RomneyCare.
What geniuses of product marketing Republicans were. Take the primary differentiation you can kill the other guy with (0bamaCare) and promote your only guy who can’t use it as a cudgel.
Last night I read an article about a college kid living in his van. It was so optimistic.
Wow, if Bush was president the kid would’ve been deprived of a life or something.
Pouted, then patted themselves on their principled back and stayed home
Here's the bottom line.
Most liberals will hold their noses on presidential election day and vote Democrat, even though their favorite Democrat was not nominated. Republicans are less likely to do so.
This implies that Republicans are more principled. It also implies that, combined with media bias and open immigration, it will be difficult for a Republican to win a national election ever again.
The ONLY reason why the “official” GDP isn’t negative is all of the deficit spending. GDP is actually negative if you take away the monitization that is going on right now by the Fed.
Hey, everybody, calm down.
Benghazi(”by ANY means”) Barry will be ok...I’m sure he’ll eventually collect Social Security payments on ALL 20-some-odd Social Security numbers he’s (allegedly) using.
He’ll be o.k.
The REST of us need to run out and buy Ramen noodles by the truckload, though.
I want to say that if this was a Republican administration things would not be so bad on the misery index, but alas, it has been a very long time since we have had a fiscal conservative anywhere near the White House, or seen real fiscal conservatism implemented from either party. The Dems are just running us off the cliff faster.
13) McDonalds opted to axe all of the Angus Burgers off of their menu, seeing their future in low price-pointed fare.
Who cares as long as the Obamaphones, food stamps, housing, college loans, Obamacare, subsidized transportation, utility assistance, unemployment, disability, etc., etc., etc... just keep on flowing. “Obama, Obama, Obama!”
There will be no recovery, once we have a Marxist state, we will fondly remember 2013....as not being too bad...
The rapid march o Marxism is bing led by republicans as well as democrats...
Cruz and Rand are just side shows, poppet masters to entertain the people who are in denial that Marxism is coming quickly to all of America
Only thing I can see is getting money out of the USA, invest in property overseas and get reay to split the looming decline and mass rioting
Romney would have been powerless...all politicians are crooked and all politicians know that we have to import people from Mexico to work for low wages and then have them pay high taxes to prolong the collapse from happening on their watch...
Whites aren’t producing a new generation of private sector workers to be taxed to death, most AA are government workers and are part of the perpetual problem so only thing left is to import and reward Spanish speaking blue collar tworkers o try to keep it all from collapsing now...
The company I work for had a big layoff today. I survived but my boss and 15-20% of the people in my organization are gone. This economy sucks.
And the hardcore folks - you know, the ones that can’t figure out why Obamacare didn’t actually lower premiums and make healthcare more available - will still believe that it was the Bush/Reagan policies that caused the crash.
Glad you survived the cuts. My husband’s company, for the first time ever, went to “summer hours” last Friday. Sure, he’ll have Friday afternoons off, but he also took a 10% pay cut. Not good...
Sad that its the lazy americans they are replacing
I thought we were already at a snail’s pace so what does really slowing down from that mean?
Seasonal hiring was nil this year as far as I can see. Usually millions of temporary summertime workers are hired but we didn’t see that reflected in the jobs numbers.
As it is, we need to hit rock bottom before any recovery in the Republic occurs.
“The ONLY reason why the official GDP isnt negative is all of the deficit spending. GDP is actually negative if you take away the monitization that is going on right now by the Fed.”
Yep. Interesting that the GDP doesn’t have to subtract out debt spending and money printing. If our GDP is about $15 trillion (and I have serious doubt it is half that number) and the fed is spending $1 trillion each year on the markets, then we have 6.6% reduction in the GDP numbers, putting GDP negative by about 3%.
I didn't pout and I didn't stay at home...I voted Libertarian. The Democrats didn't do all this damage by themselves, they had plenty of help from the Republicans.
You are correct sir.
As long as the Re-pube-icans keep running guys like Rmoney at us, they are doomed to be a bunch of losers.
Sometimes I wonder if they aren’t playing for the other side. Other times, I’m sure they are.
I want somebody to vote for who has a spine and a case of red-ass. Fire me up and fire up the Conservative base, or go home.
>> “Prepare as best you can, folks.” <<
And get ready to trust in Yehova’s manna!
>> “As long as the Re-pube-icans keep running guys like Rmoney at us...” <<
You mean the Wee Publicans?
>> “The Democrats didn’t do all this damage by themselves, they had plenty of help from the Republicans.” <<
And let that fact never go unnoticed again.
there are no jobs for the young.
the old can not retire.
the old can not sell their homse to move to a retirement place.
people are not spending on credit.
people can not get credit for large purchases.
Banks make more money investing rather than lending.
banks do not pass along any interest as if they are coluding to keep interst on bank account balances at near zero.
nobody sane trusts obama.
low information voters know they can steal, mooch, or just vote whatever they want out of the treasury.
Democrats still exist.
Bush 43 will possibly be the last Republican President this country ever has.
Or so it seems.
This house-of-cards cannot continue forever.
I’m just concerned about when the music stops and more than one chair has been taken out of the circle. And they have.
Oh, of course. They cannot see the add’l 6 trillion. And more.