The U.S. Economy Just Took A Very Dark Turn
Francesco Abbruzzino, The Uncensored Report, LLC
The road ahead certainly does not look promising. For much of 2022, there has been a lot of debate about whether or not the U.S. economy is in a recession, is headed for a recession, or is about to turn in a positive direction. Unfortunately, virtually all of the numbers are now telling us that economic conditions are starting to deteriorate quite rapidly as we approach the beginning of 2023, and even rabidly optimistic business leaders such as Jeff Bezos are warning us to prepare for harder times. So now the framework for the debate over our economic future has shifted. At this point, there are some that expect a relatively minor recession and then a recovery, and there are those such as myself that expect immense pain in the years ahead. There are so many warning signs that indicate that the entire system is starting to crack and crumble, but a lot of the “experts” are still hoping that our leaders will find a way to turn things around somehow.
On Wednesday, those of us that closely watch the economic numbers received quite a shock.
The latest figure for the Chicago Purchasing Managers’ Index came in way, way below expectations, and that is really bad news.
If you are not familiar with the Chicago PMI, here is a pretty good definition…
The Chicago Purchasing Managers’ Index (PMI) determines the economic health of the manufacturing sector in Chicago region. A reading above 50 indicates expansion of the manufacturing sector; a reading below indicates contraction. The Chicago PMI can be of some help in forecasting the ISM manufacturing PMI.
Economists were expecting the survey to come in at around 47, but instead the final number came in at just 37.2…
In a massive downside surprise, the Chicago PMI survey just printed 37.2 (vs 47.0 expectations), plunging to its lowest level since the peak of the COVID lockdowns in 2020. This was below the lowest estimate of 25 economists surveyed.
In the entire history of the survey, the Chicago PMI has only plunged below 40 during times when the U.S. economy has been in a recession.
Other data points are also telling us that th U.S. economy is clearly trending in the wrong direction…
-Consumer confidence has declined for two months in a row.
-U.S. home prices have now fallen for three months in a row.
-Existing home sales have now dropped for nine months in a row.
The housing industry has not been in this much of a mess since the last housing crash.
According to the NAR, home sales were way down all over the nation last month…
“From a year ago, all four regions had double-digit declines in sales in October. The West had the most significant dip at 37.5%, followed by the South, which fell 27.2%. The Midwest decreased by 25.5%, followed by the Northeast, down 23.0%.”
And if the Federal Reserve continues to hike interest rates, things are only going to get worse.