The alarm bells are ringing as profits for U.S. small firms have plunged to their lowest levels since the financial crisis. In August, a staggering 37% of small businesses reported falling earnings, marking the worst reading since January 2010 and one of the bleakest in over half a century. This isn’t just a blip on the radar; it’s a sign that the economic foundation is cracking, and we should brace ourselves for a deteriorating job market.
Adding to the unsettling news, the Federal Reserve has finally acknowledged the weakness in the economy, admitting they are behind the curve. In an unexpected move, they cut interest rates by 0.50%, the first reduction since the March 2020 COVID crash. This cut comes with expectations for two more 0.25% cuts in 2024, a major surprise echoing the darkest days of the 2009 financial crisis.
The Index of Leading Economic Indicators is likely to continue predicting a recession, sending shivers down the spine of both businesses and consumers alike.
Sources:
www.nfib.com/surveys/small-business-economic-trends/
🚨US SMALL FIRMS PROFITS FELL TO THE LOWEST SINCE THE FINANCIAL CRISIS🚨
Net 37% small businesses reported falling earnings in August, the most since January 2010.
This is also one of the worst readings in over 50 years.
Expect the job market to deteriorate even further. pic.twitter.com/DnQpB0NSZ2
— Global Markets Investor (@GlobalMktObserv) September 18, 2024
The Index of Leading Economic Indicators likely continued to misleadingly predict a recession last month pic.twitter.com/D5yZ93NltQ
— Win Smart, CFA (@WinfieldSmart) September 19, 2024