As 2024 unfolds, ominous signs loom over the economic horizon, with the Druckenmiller Recession Indicator delivering a stark warning. Plummeting to its lowest level since 1999, this indicator, historically associated with economic downturns, is flashing red, raising concerns about the state of the economy.
Leading economic indicators have endured a daunting streak, falling for 20 consecutive months. While many have clung to the belief in a recession-proof economy, the latest ISM data paints a different picture. A mere 5.6% of purchasing managers report any growth, mirroring statistics not seen since April 2009.
The velocity of bank credit, illustrated by the chart of real GDP YoY, Bank Credit YoY, and M2 Money growth, tells a concerning tale. With a staggering crash to -13 in Q3, the economy grapples with an evident struggle in the realm of bank credit.
US manufacturing PMI further compounds the apprehension, with only two months in 2023 escaping contraction. The final December print, landing at 47.9 (from 48.2 flash and 49.4 prior), paints a somber picture of the manufacturing sector’s challenges.
In a world already fraught with economic uncertainties, disruptions in the Red Sea have sent spot container rates soaring by a staggering 173%. As the signs of a looming recession intensify, navigating the economic landscape becomes more challenging, with each indicator pointing towards a potential storm on the horizon.
The Druckenmiller Indicator has fallen to its lowest level since 1999 and is at levels previously associated with recessions 👀 pic.twitter.com/8T7JS2XtDx
— Barchart (@Barchart) January 4, 2024
Probably nothing, it will be soft landing folks
Chart @JeffWeniger pic.twitter.com/uIriAspp0D
— Michael A. Arouet (@MichaelAArouet) January 4, 2024
Everyone believes the economy is recession-proof. Yet, the ISM today shows that the grand total of 5.6% of purchasing managers are experiencing any growth. Last time we were here? Try April 2009! pic.twitter.com/hHKqjc6BXq
— David Rosenberg (@EconguyRosie) January 3, 2024
Spot Container Rates Surge By 173% Due To Red Sea Disruptions