Economic Storm Brewing: Recession Looms as Warning Signs Multiply

by
Sharing is Caring!

The warning signs are becoming more pronounced, and it appears that a recession may be looming closer than expected.

Tightening liquidity is often a precursor to economic downturns. This is evident in the increasing number of companies closing their doors and factories declaring bankruptcy. These are clear indicators of economic distress that should not be underestimated.

There’s been a noticeable shift in the flow of money out of the economy. This monetary exodus is putting additional strain on an already fragile economic situation, heightening concerns among experts.

Adding to the complexity is the Employee Retention Credit (ERC) program, which appears to be channeling funds disproportionately to the wealthy. This has raised questions about the equity and effectiveness of economic policies.

When you couple these factors with two consecutive quarters of negative GDPplus growth, it’s a clear signal that we’ve entered a recession. The recent surge in the 10-year Treasury yield to a new cycle high of 4.732% is further evidence of economic instability.

Interestingly, Americans are flocking to casinos at record levels, possibly as a response to economic uncertainty. This suggests that people are looking for alternative ways to secure their financial future.

See also  French PMI signals a major warning: largest employment drop since pandemic.

Existing home sales typically decline before recessions, and this trend is concerning. The collapse in multifamily starts is another alarming development. While it may not immediately impact construction employment on existing projects, companies will likely start shedding workers as financing conditions for new multifamily housing projects become nearly impossible.

The job market is showing signs of pessimism. The expectation of being offered a new job has declined in August, dropping to 18.7% from 21.1% a year ago, according to CNBC.

These interconnected factors paint a concerning picture of an economy facing serious challenges, raising the specter of an impending recession.




https://www.philadelphiafed.org/surveys-and-data/real-time-data-research/gdpplus




See also  Midwest and Ohio Valley brace for life-threatening winter storm with record cold.