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Business/Finance See other Business/Finance Articles Title: US recession coming as consumer crutch ‘about to be kicked away’ - SocGen strategist RT...The American economy may soon plunge into recession, as consumer strength is showing signs of weakening, says Societe Generale strategist Albert Edwards. Consumption makes up 70 percent of the US gross domestic product. However, this support is "about to be kicked away,” the analyst said. "The only thing keeping the US out of recession is the US consumer. It is difficult to say consumption is driving the economy forward; rather it is like a wood, worm-ridden crutch creaking under the strain of holding up a dead weight economy. This recovery, the fourth longest in history, is surely nearing its end," Edwards wrote, quoted by Business Insider. According him, the current trend resembles 2007, when robust consumption tempered economic contraction in the first quarter, but by November the economy fell into recession. SG's Edwards sees US econ on crutches. 'Only US consumer is keeping econ out of recession –but for how much longer?' http://pic.twitter.com/a1LRwIKe6m — Holger Zschaepitz (@Schuldensuehner) September 1, 2016 Growing inflation and higher prices will make consumers more cautious about their purchases, Edwards said. “One key and imminent risk for the consumer is a rapid pick-up in headline CPI inflation as the weak oil price of H2 last year starts to drop out of the yoy calculations. Headline CPI inflation is set to rise rapidly from the one percent where it has hovered for the past six months and to converge with core CPI, standing at 2.25 percent. That will sap some 1.25 percent from real personal disposable income growth, which will decelerate rapidly, removing the key prop for recent moderate robust consumption growth,” he said. US budget deficit approaches $600bn, public debt to reach 77% of GDP t.co/x5iN2k3Ym0 — RT (@RT_com) August 24, 2016 A tight labor market may prop up wages, though, said Edwards. "But with the Fed confronted with a traditional end-of-cycle, tight labor market with accelerating headline CPI and wages, the pressure to hike rates aggressively will be fierce. Perhaps the next recession will be of the normal, made in Washington variety after all," he wrote. Poster Comment: Olive Toast: Albert Edwards has a long history of incorrect predictions if you believe this guy then mortgage your house and buy short you get rich. +24 BlueChefHat: The article is nonsensical anyways as every developed economy is a consumer economy that's how it works. Take China for example it's converting to a consumer economy that's driving it's growth rate down but creating a sustainable economy in the process. One which the whole of china will benefit. As the worker makes money he wants a nice car and new home like everyone else so he becomes a consumer and buys the product. The product in turn follows the laws of supply and demand. As China's demand for consumption increases the product increases in value making it more expensive to export. Hence it balances itself out. History has demonstrated this over and over. Japan is a good example of a recent case. Their economy exploded, then they became a consumer economy and leveled off, now they are the 3rd largest economy in the world. +12 chewinggum: And the 1st of countries with the largest Debt % of GDP 1 Japan 226, 2 Zimbabwe 202.4 3, Greece 175 Olive Apple: Capitalism is defined as monopolization of capital BY THE FEW, the opposite of free enterprise which is capital widely dispersed among thousands of small, local businesses taking care of local business. Free enterprise is the best possible economy, that's why it is outlawed in the US by means of thousands of idiotic government regulations, while the capitalist monopolies, who own the government, hire a herd of lawyers at pocket change for the profit they extract from an economically enslaved public, often unlawfully. Tatarewicz: "Free enterprise ... is outlawed in the US by means of thousands of idiotic government regulations..." But keep in mind each government regulation is a response to some idiot citizen's complaint about some problem said idiot was too stupid or lazy to solve on his own. Bureaucracies just love getting complaints; means hiring more bureaucrats,giving them more power over people. Purple Sword: There's always a recession post Election. Doesn't take an expert to see this is happening already. Global markets are down, inflation is on the rise, and peoples incomes have not changed, and people are losing jobs. Doesn't matter how much money the Feds pump into the system, it wont help this time. Green Pizza: Just civil war, problems solved. +2 Red Cup Cake: No civil war. People are too distracted with their duck dynasties and pokemons and Xmas season is around the corner. +5 Galimaja: The recession in USA would mean the war outside their borders, might be in Philippines this time , or Uzbekistan. However, as a rule these so called 'experts' are the worst predictors ever. My flipped coin could show a better result Olive Apple: The U.S. has been in a depression that would make that of the 1930s seem a picnic for more than two decades. Take away the government checks, which are just more debt unlawfully created and owned by the criminal bankers, who are enslaving all with it, and you would see the worst third world chaos that every existed. The prop up cannot last forever. There must be some real economy or a massive change in money creation to stop major disaster. Gold Anchor: There is supposed to be a new world money being brought out end of this month on a Friday... then watch the banks have a holiday for a week and see what your bank account is worth when they open, all planned, end of dollar as major trading currency Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 1.
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WTF Chart Of The Day: US Factory Orders Tumble For Longest Streak In History 21 Months... US Factory Orders have decline year-over-year every month since October 2014 (the end of QE3). This is the longest period of decline in US history (since 1956) and has always indicated the US economy is in recession... While headlines will crow of 1.9% MoM gain (which missed expectations of a 2.0% rise), the trend is simply ugly - Year-over-year Factory Orders fell 3.5% As Bloomberg also notes, there’s one key takeaway from the Commerce Department’s report Friday on U.S. factory orders. The value of unfilled orders dropped in July to the lowest level in two years, indicating producers are having an easier time meeting demand. With soft sales, factories have little reason to add as many workers to their payrolls and may find it difficult to raise prices. Employment in manufacturing dropped 14,000 in August, the most in three months, another report from the Labor Department showed Friday. This is fully explainable by the fact that the US economy is in a depression. No one wants to use the "D" word in an election year, but it appears that nearly all economic indicators are pointing that way. Share: Facebook Twitter Google Plus Myspace MSN Live Yahoo LinkedIn Orkut Digg Delicious
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