Our Double Dip Is Here

 

The other day, I showed readers this graphic….

image

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.

image

Source

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.

My thoughts……. 

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…..

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Bolt your shorts on, this is going to get ugly. 

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8 Responses to Our Double Dip Is Here

  1. Dave G says:

    Simply put, down the drain we go if Obama gets back in.

    • suyts says:

      I think regardless of Obama’s win or fail in the election, we will officially hit a recession before the end of the year.

      If Obama is re-elected, we’re screwed. If Romney follows through with what he’s stated, then we quickly bounce out.

      • philjourdan says:

        I cannot agree we “officially” went into recession in June, but I can agree with your comment here. BY year’s end, we will be in a recession again. The duration and severity will be greatly influenced by who wins the election.

  2. DirkH says:

    It’s about time.

  3. cdquarles says:

    Capital goods/services drop first just before and at the start of a recession. Capital goods/services rise first just before the end of a recession and at the start of a recovery. My rule of thumb, economically, is this: I watch truck traffic/rail traffic carrying capital goods vs consumption goods. When things are good, there are lots of capital goods and the ratio of capital goods to consumption goods are high, with lots of traffic for both. When things are bad, capital goods drop dramatically and the ration of capital goods to consumption goods drop, with less traffic for both. In ’07 both capital goods and consumption goods were still ok, In ’08 the capital goods dropped off first then consumption goods (I lost my job in Sept 08 after the financial markets crashed). I was in the car business then. The car business still hasn’t come back to where it was (and my boss was also in the real estate business … so I know that the cash flow basically stopped in Sep/Oct 08). I have been ill off and on for a number of years, and was disabled for a period of time. I tried to get back to work but didn’t get another job until 3/11; but I couldn’t hold up medically (I had 15 K or so of medical bills in ’10/11). I am now disabled. I would much rather work, but 😦 being ill and in your 50s makes it tough to compete against all of those healthy 20 and 30 year olds who also have had trouble getting/keeping jobs (my children have had it rough).

  4. gator69 says:

    I’m still seeing layoffs. In thirty plus years of employment, I have never seen anything like this. I am still employed, but my income has been cut in half, and my only neighbor is in the same position. I wonder what the figures are for those of us who are still working, but not making enough to pay more than our bare necessities. We won’t know the full extent of the damage for years to come, if ever.

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