For a long time, people have been trying to tell me that the U.S. economy is headed for a new golden era.
They insist that the U.S. will be more powerful and more respected than ever before, and that we will see unprecedented prosperity in this nation. But despite extremely wild spending by the U.S. government and exceedingly irresponsible intervention by the Federal Reserve, the U.S. economy has not even had a “good” year in ages. As I have pointed out numerous times, we have not had a year when U.S. GDP grew by at least 3 percent since the middle of the Bush administration, and that makes this the longest stretch of low growth in all of U.S. history by a very wide margin. Many believe that brighter days may still be ahead, but all of the economic numbers that we have been getting in recent months make it abundantly clear that a new economic slowdown has begun. I shared 14 of those numbers earlier this week, and I will share some brand new ones with you today.
Let’s start by taking a look at how U.S. consumers are faring. U.S. consumer confidence has now fallen for 3 months in a row, and this week we learned that the Bloomberg Consumer Comfort Index has just fallen at the fastest pace in more than 8 years…
U.S. consumer comfort suffered its biggest weekly decline in more than eight years on a pullback in Americans’ assessments of the economy, personal finances and the buying climate, possibly signaling more moderate household spending approaching the holiday-shopping season.
The Bloomberg Consumer Comfort Index fell 2.4 points, the most since March 2011, to 61 in the week ended Oct. 27.
How in the world can anyone possibly claim that we have a “booming economy” after reading that?
We also just got another depressingly bad manufacturing number. Experts were expecting a reading of 48.3 for the Chicago Purchasing Management Index, but instead it came in at just 43.2…
The Chicago Purchasing Management Index sank to 43.2 in October from 47.1 in the prior month. This is the lowest level since December 2015. Economists has expected a reading of 48.3, according to Econoday.
Any reading below 50 indicates deteriorating conditions.
We were promised a “manufacturing renaissance”, but instead manufacturing is now the smallest share of the U.S. economy that it has been in 72 years.
That is terrible.
But at least we have plenty of government jobs, eh?
In the private sector, things are getting really tough, and we are starting to see lots of big companies lay off workers.
For example, Molson Coors just announced that they will be laying off up to 500 workers as they desperately search for a way to survive in this difficult economic environment…
To further drive efficiency and enable growth, Molson Coors is consolidating and reorganizing office locations. The Denver office will be closed and Chicago will be designated as the North American operational headquarters. Functional support roles currently housed in several offices around the country will now be based in Milwaukee, Wisconsin.
As a result, we expect to reduce employment levels by approximately 400 to 500 employees as part of this restructuring, primarily in our existing United States, Canada and International reporting segments, as well as Corporate.
You know that things are getting tough when even beer companies start laying people off.
Of course the “retail apocalypse” continues to escalate, and we just learned that Forever 21 will be closing most of their stores and laying off most of their employees…
More than 100 Forever 21 stores are slated to close as part of the fashion retailer’s Chapter 11 bankruptcy protection case, according to court documents filed this week.
The family-owned company, which has about 32,800 employees, said it would close “most” of its stores in Asia and Europe and up to 178 stores in the U.S. when it filed for protection Sept. 29.
A similar scenario is playing out for Dressbarn. According to USA Today, all of their 544 stores “will close no later than Dec. 26″…
Liquidation sales at the remaining Dressbarn stores will start Friday, the struggling retailer announced Wednesday.
While the 544 stores will close no later than Dec. 26, the women’s clothing website is expected to relaunch in 2020 with a new owner, the company said in a news release.
It has been hoped that a limited trade agreement with China might bolster the economy at least temporarily, but now we are learning that Chinese officials expect “phase one” of the deal to “soon fall apart”. According to CNN, the Chinese are pessimistic that our two countries will ever be able to “reach a full trade deal”…
Chinese officials have expressed doubts about whether the world’s two largest economies can reach a full trade deal, Bloomberg reported. That is casting a long shadow over the “phase one” agreement that the countries reached earlier in October.
This is consistent with my warnings from previous articles. The Chinese wanted the Trump administration to stop the implementation of any more tariffs, and they were able to achieve that with “phase one”. But in order to move forward with “phase two”, the Chinese are going to insist on the removal of all tariffs…
According to BBG’s sources, this is the bare minimum that Beijing would accept to move ahead with Phase 1: a commitment from the Americans to removing tariffs in Phase 2, and agreeing to cancel the next round of tariffs, set to take effect in December.
This is something that the Trump administration will never agree to, and so that puts us back where we originally started.
The Chinese will continue to “negotiate”, but only for stalling purposes.
There is only about a year left until the 2020 elections, and the Chinese are hoping to run out the clock on the Trump administration with as little disruption to their own economy as possible.
Unfortunately for the Chinese, Trump could possibly win another term, and if either Elizabeth Warren or Bernie Sanders win they could potentially be even tougher on trade with China.
In any event, we should not expect a comprehensive trade deal with China any time soon, and that is really bad news for the economic optimists.
Of course the truth is that everything that I have just shared is bad news for all of us. The U.S. economy is seriously deteriorating, and things are only going to get worse in the months ahead.