The other day, I showed readers this graphic….
It was a post about how the dumbasses were blaming economic uncertainty for the poor jobs performance. Sadly, those were really accurate. The government has revised the GDP growth for our second quarter downward to an annualized rate of 1.3% growth.
Well, we now have certainty. While this doesn’t meet a common definition of a recession, (there’s no official designation but 2 consecutive quarters of zero or negative growth is accepted by many) there’s some other news which makes me believe we are in a recession now. Orders for durable goods collapsed a full 13%. Shipments of manufactured durable goods in August, down two of the last three months, decreased 3.0 percent. Unfilled orders for manufactured durable goods in August, down 1.7 percent. Inventories of manufactured durable goods in August, up thirty-one of the last thirty-two months, increased 0.6 percent. Nondefense new orders for capital goods in August decreased 24.3 percent. Well, the news for capital goods were essentially the same as for durable goods.
What does this tell us? Inventories have increased every month except on for nearly 3 years. But, demand for our goods have dropped “off a cliff”. We are told jobless claims were lower than expected at 359,000. That’s a lie. Expect it to be revised upward sometime soon. Demand for goods doesn’t drop off a cliff and employers hire more people. It simply doesn’t ever happen that way. Especially when inventories have increased.
Those were my thoughts. After writing that I went to see what other people were saying about this news.
Mike “Mish” Shedlock …….. I am very comfortable with pegging of the start of the recession in June and I expect more downward revisions in GDP and employment are on the way.
Lakshman Achuthan, CEO of ECRI(Economic Cycle Research Institute) says the US recession started in June.
I’ve already shown readers the workforce performance of late…..
Bolt your shorts on, this is going to get ugly.