After 2 years when the LEI went up every month, the LEI indexes have STALLED.
@Larry L and here's the deal: if employers cannot be bothered to give raises, workers cannot be bothered to spend or borrow.
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Neither, Depression. Sorry people I have history on my side.
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Certainly, some industries or areas of the economy are in recession. Retail for example, the job losses there have been tremendous. But those jobs are mostly held by women and people of color and trump doesn't care about them. He only cares about manly men jobs like mining, coal, cars etc.
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Sad to say (about human nature) that nothing can defeat Trump in 2020 but a bad economy. There is no action, crime, word or deed by this (or any) U.S. 'leader' that the voters won't turn a blind eye to, as long as there is a smooth economy. Tragic.
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Trump has a solution: "Other People's Money." It's the methodology he has used throughout his career as a "business man." Trump inherited substantial wealth, then recklessly embarked on a wide variety of ill-conceived, ill-timed business ventures in an effort to squander it. And whenever things began to go sour, he relied on (1) family wealth; and (2) excessive borrowing to try to bail himself out of a jam.
Then he declared bankruptcy and 'renegotiated' his obligations. Or in plain English, he stiffed the lenders, investors, vendors and workers whom he promised to repay.
That's Trump's solution now. Having overpromised and underdelivered on the economy, he has three simple solutions: (1) Keep insisting that all is well, that the budget is balanced, the tax cuts are paying for themselves, the economy is the best it has ever been, manufacturing and mining jobs are growing by the millions, we're "winning big time." Alternate facts are as good as or better than the truth, after all.
(2) Easy Money. Keep lowering interest rates, keep lowering taxes, keep running up huge deficits, keep pilfering the Treasury for billions to pay off blocks of voters whose livelihoods are threatened by his erratic 'trade wars' and other reckless 'policies.' (Where do you think that $30 billion payoff to soybean farmers came from, the tooth fairy?).
(3) Blame others. If it weren't for the Socialist Dems, the Fed, the 'failing New York Times,' things would be great.
Easy peazy.
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Don’t worry. Trump will sign a weak trade deal if he thinks it will get him elected. It will not reverse the damage he has done. He continues to be played the fool by China, Russia, North Korea and Iran.
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Economy good??? Fake News for the middle and working class. TCJA resulted in loss of unreimbursed business deductions for the middle class and a tax code too complex for working class to benefit. Both middle class and working class are working multiple jobs to survive. If you lose your full-time job with benefits especially health care benefits good luck. Savings to your corporate employer.
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Uninformed folks like to use Australia as an example to show that certain data that holds for the US is contradicted by facts from Australia. For example. people who want to deny that all periods of federal surpluses in the US that have significantly paid down the national debt were followed by terrible depressions point to periods in which Australia (and Canada) have had federal surpluses with good economies.
The difference is easy to see. A federal surplus means that money is being sucked out of the private sector into the federal sector. When enough money is sucked out, bad things happen UNLESS MONEY IS COMING IN FROM SOME OTHER PLACE.
Australia (and Canada) have mining economies. The periods of surpluses were also periods of large trade surpluses. We have never had such large trade surpluses.
Thus Julia Coronado who is quoted as saying "Slow growth could actually cause higher unemployment without turning into a recession." by pointing to Australia is pointing in the wrong direction. She should simply look at US economic history to see that slow growth has always been bad for our economy.
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Falling oil prices are likely to lead to the next slowdown, as in 2015-16, affecting steel and equipment investments. Trucking is already in a recession, as in manufacturing in some places like Wisconsin, because of the troubled agriculture sector.
Consumers are always the last to find out about slowdowns but once they do, their discretionary spending can fall off pretty rapidly. Retail overall was mostly down except for automotive, which is likely a response to falling car loan rates, now in the 2.5% at my bank, even without car company rate buydown incentives.
Regulators worldwide are circling tech companies like Google, Facebook and Amazon for anti-competitive behavior and privacy "oversharing". Tech companies in general were the only ones continuing to sustain capital investment since the Trump tax cuts. Everyone else has been mostly buying back stock, an indication of a lack of investment opportunity, because of trade war uncertainty.
A slowdown might actually forestall or moderate the next recession. But it comes at a time when US car companies need to make vast investments in electric vehicle platforms and bankruptcies are rising among fossil fuel extractors because of falling global demand.
It is a good time to move any recent investment gains into safer assets.
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Jeanna Smialek has given an academically strong description of recession,slowdown&contraction of economies.Recession is now in currency because everyone is talking about it across the world.India has one of the fastest rates of growth of GDP.And yet,economists in India point out to a slowdown!Japan,Europe& other economies are afflicted with slowdowns or worse.Politics& economics are very closely intertwined.Recent history has shown that US Presidents who were in office during recession. Invariably lost.The fear of Donald Trump is that economics trumps all other issues for the voters.When you lose a job,nothing else matters.A voter thinks of social issues when he is employed.Trump is therefore constantly trying to align the Federal Reserve into his fight against a recession.
Economists distinguish between slowdowns&recessions.The general opinion is that there is a perceptible slowdown of US economy,though none call it a potential recession.Smialek has itemised various situations required for a recession to set in&they are absent presently.The biggest change in US has been the growing role of the Federal Reserve which has become extra- sensitive in warding off a slowdown or recession by adjusting the monetary policy.In fact,there is hyper-interest by the FED.I wish Smialek had also talked about what Larry Summers said on” secular stagnation”&jobless growth.There is still time to decide as US&China are set to agree to disagree on trade!Trump fears a slowdown augurs a recession!
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@Dr.Pentapati Pullarao.Ph.D Unemployed workers think a lot about social issues, especially about the lack of a social safety net.
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It's not actually a lot of comfort that there isn't a recession if you've lost your job. People tend to worry more about paying their bills than whether the nation itself is financially unsteady.
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Uh huh. I'm sure I heard a certain someone (who I cannot bring myself to name...) tell us that “We’re bringing it [the GDP] from 1% to 4%. And I actually think we can go higher than 4%. I think you can go to 5% or 6%.” OK, great! But when? Or was that just another lie?
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@AlexanderTheGoodEnough
He would bring it to 4% or higher growth of all it took is a few tweets to make that claim. Thankfully this is one fact he can't change with a tweet and a tantrum. At least not yet, though it's worrisome that the NOAA was willing to push tweeter-friendly facts. Hope the BLS and BEA don't fall in line to push alternate facts about GDP.
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The largest issue is the Trump’s White House. The WH
lacks the leadership, numbers and mental capacity personal to handle a “ Black Swan” event. The miss handling of foreign policy and the revolving door of administrative and bureaucratic experts is setting up the economy in a downward spiral. Aka black swan. So as Mr Trump fiddles(Nero) we might see a stock market in a quick spiral the will crush consumer confidence.
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Trump is willing to destroy America one way, or another. Any who studies his business history sees debt first followed by bankruptcy - who loses money operating casinos? The Fed is the last stop gap we have to prevent an economic apocalypse.
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I work in transportation of the worlds trade and I can tell you our industry is already in recession. I’ve cut back on spending and expect zero or a vastly reduced profit sharing check this year. Enough people fall into my category and yes you will have a national recession.
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It would seem all the focus is on the economy. When does the catastrophic impact of global warming induced natural disasters get figured into the equation? Even a very resilient economy can only stand so much.
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A shrinking economy would be good news for the environment.
Increased economic activity is the driver of all our environmental problems: climate change, pollution, you name it.
Enough with the growth-o-mania!
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@Phil Cafaro: That depends on what the ‘economic growth’ is comprised of. If the economy transitions from fossil fuels to renewable energy; if agriculture transitions from petro-based monoculture conducted by mega-agribusinesses to sound human scale ‘lutte raisonée’ and organic methods; if millions are employed to abate carbon emissions and to address the consequences of climate change; if more are employed in education, child care, care for the elderly, the arts; if our “GDP” measures the value of human services not presently included in our measurement methodology —we can indeed have rapid economic growth AND a healthier environment.
The economy does not have to be based on plunder. It does not have to prioritize profits for the few over quality of life for the vast majority. It’s a question of how we use our natural and human resources, and what we decide has value that merits measurement and inclusion in “GDP.”
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@chambolle Those are a whole lot of 'ifs'! And even if we make all those changes, less economic activity is still better than more, in terms of lessening environmental impacts.
Pursuing the right economic goals is important, but so is scale. Even a population of angels can be unsustainable if it gets large enough.
In any case, it sounds like we are on the same page on the need to think hard about the purpose of an economy and to regulate it accordingly.
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@Phil Cafaro-I spent 33K on solar for my home this year. That was about 4K more because of tariffs. That was economic activity that was good for the environment.
Replacing a gas car for an electric car is good for the environment. Putting better windows, doors and insulation in your home is good for the environment. Buying appliances that use less energy is good for the environment.
There is lots of economic activity that can reduce carbon emissions.
Increased carbon use is not the same thing as increased economic activity.
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If President Trump reassures is the economy is strong and forging ahead we should heed him and prepare for an economic disaster, especially after his foray into weather prediction. If he says hot, you can count on cold, 80 - 20.
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Oh, we made it out of the 2008 recession? Working class America would like ten years of back-pay and raises, thanks.
Snarky-ness aside, living in our country costs more than workers make, and the culprit aint taxes. I'm guessing most folks will have to wade through another recession before politicians on both sides of the isle start thinking about working families. I'll believe it's a good economy when workers make more or the costs of childcare, education, healthcare, just about everything become lower.
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I'd think working class American would also want difference from the 40 years of flat or regressive wages they received while executive pay ballooned. Not to mention the ability to bargain with management. Or the larger percentage of taxes they pay compared to the wealthy. Unfortunately so many working class Americans continue to vote for those who work against their interests.
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@Michael
" living in our country costs more than workers make" This is a very true statement. It used to not always be this way. The CREATION of the middle class in America involved a large transfer of wealth from the upper class to help subside a middle class that would have never been able to afford the conveniences of modern day living; it also served to mollify any resistance from this large economic bloc. Now the well has run dry (or the spigot has been applied) and we are seeing the ramifications of a middle class left largely to its own fate. Now combine this with the fact that close to 40% of American workers don't even pay federal taxes. AI will also leave many people jobless in the next 25 years. This is a perfect storm. The only candidate to even address this issue is Andrew Yang.
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@Topher S Yes. I'm out at least 30% of my income in taxes. I'm willing to cut that to 15% if the rich will agree to increase the taxes they actually pay from basically zero to 15% of their income, like me. No outs.
Isn't that fair?
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Germany may already be in a recession do to Trump’s trade war with China. If that’s the cases the EU may follow soon. China economy is slowing do to higher cost of their products in the US. Is the America on another planet?
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Given how little connection there has been between GDP and the general welfare of most Americans over the past half-century, this piece is not particularly reassuring. If the incomes and wealth of most Americans don't improve when GDP steadily increases there is no particular reason to think most of us can expect anything but a personal downturn in a low growth economy. This combined with the past half century of almost continuous assaults on social welfare programs (by Republicans and Democrats alike) does not fill me with hope.
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@Keitr Yes. If the measure of a robust economy is that the filthy rich are getting richer while the working class sinks into poverty, we need to redefine some measures.
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@Keitr, most people don't know that in order for contract and consulting to pay the same as being a regular employee (in order to take into account payroll taxes, PTO, sick days, holidays, 401K matches and cost of benefits), the hourly rate must >>>AT LEAST 40%<<< higher than your base salary.
And that is assuming they pay for other expenses like business travel. Nor does it take into account risk.
Do they pay for that? Not really. It is apparently expected that you absorb these expenses. If you are not offering the equivalent don't bother calling me. It is waste of my time (and theirs).
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Someone said in a Canadian News outlet that US Corporate insiders have been selling their shares off in a slow but sure manner since June. There was mention that Bezos had to sell off a chunk because of his divorce but they claimed the numbers were still high with respect to these seek offs.
Is that true? Serious question.
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The rich in America are different from you and me: they live by addition and multiplication, while the rest of us live by subtraction and division.
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@Pottree This is the same scenario that occurred before the last Great Recession, so I was wondering if this stock sell off is actually occurring and should we be scared?
Sorry, I am one of those people who like to look bad news in the face so I can be prepared. I like to batten down as many hatches as I can and gird my loins as well.
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Many economists think that we live in times of great economic uncertainty, but in fact this is not true. No matter what is happening with our economy, we do have certainty about how "Michigan Man Of The Year" will behave.
Here are the facts:
1) Our "Stable Genius" will blame other people, some of who he appointed for any economic decline or downturn in the stock market.
2) Our "Stable Genius" will take credit for anything good that happens to the economy.
3) Our "Stable Genius" will call all "negative data" about the economy "Fake News " and part of a conspiracy against HIM personally. He will put out his own "facts" about the economy.
4) Our "Stable Genius" will propose and try to enact lot's of crazy economic policies to get reelected even if they damage our economy or bankrupt the country.
5) Most important of all, our "Stable Genius" will NEVER be acting in the best interest of America, but only in the best interest of himself and his family and the .1 percent.
In fact, these are all certainties that we can all depend on and they create great stability in our lives.
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@Son Of Liberty There is something to be said for knowing where you stand ...
It's a recession when it affects your neighbors. It becomes a depression once it affects you and yours. For some of us, especially those of us who are in our 50s, it's a downward spiral no matter what fields we're in: if we lose or lost our jobs finding new ones that pay decent wages is next to impossible.
I don't understand how this country can keep on going when so many people are working two lousy jobs or can't find one decent job. The only thing that comes to mind is all those lovely credit cards and loans that allow us to enjoy the lifestyles we have. If our creditors ever called in those debts at higher rates than we have now we'd be in an awful lot of trouble.
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The business model pioneered by George Oglethorpe in Georgia. The next step in its development was outright slavery. Everything old is new again.
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@hen3ry In a nutshell.
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Why would the Fed need to cut interest rates if the economy has great momentum?
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Trump is in hock up to his eyeballs, some of it legitimate debt to Deutche Bank, some to shady underworld characters abroad - but lowering his adjustable rate debt will benefit him and his spawn, so now that he’s in a position to try to illegally manipulate interest rates and markets, why not try?
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Trump's ignorance about trade policies will pull the country into a recession while Republicans stand by twiddling their fingers and doing nothing.
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@Jacquie Except most of the Democrats favor the same policies. Has a single Democrat proposed a "peace treaty" with China by going back to the Clinton/Bush/Obama days when China was rolling us?
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@Erik During the debate last night it was clear Democrats do not favor the same Trump policies.
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@Erik Well, we had the TPP that was a counterweight to China. But that was negotiated under Obama's watch, so it had to go.
Sad.
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