August 9, 2022

Philip Schiff: It’s Getting Tougher to Deny Recession Actuality

“When you have a 47 on the services index, you recognize the US economy is in financial bad times because the service sector is actually everybody looks to to power the economy. “

It’s getting harder and harder for recession deniers to justify their optimism. And some people seem to be waking up to that particular reality.

Late last week, we obtained more economic data plus corporate earning news that will proves the economic confidence that’s been bandied about for months is unfounded.

Weekly first-time jobless claims   rose for the third consecutive week, hitting 251, 000. This was higher than forecasted and it’s the highest level of unemployed claims since last Oct.

The  Philadelphia Fed Manufacturing Index   for Come july 1st also came out. The general opinion was for 0. four, up from June’s -3. 3 print. Instead, the number came in at -12. 3. That was 50% below the low end of the consensus. In the meantime, the employment index dropped 9 points to nineteen. 4. That was its cheapest reading since May 2021.

The  leading economic indicator index for June fell   0. 8% within June off a May number revised lower in order to down 0. 6%. It was the fourth straight monthly drop in that index.

The composite PMI catalog fell to 47. five in July from 52. 3 in June, striking a 26-month low. The PMI services index dropped even lower to 47. Anything below 50 is supposed to indicate a recession. Peter said the big drop within the service sector was particularly troubling.

“ When you have a forty seven on the services index, you understand the US economy is in economic downturn because the service sector is exactly what everybody looks to to power the economy. ”

Peter said this data really should surprise people because it’s absolutely nothing new.

“ This should be obvious, but people have been in denial about the weakness in the economy. Therefore , as all this weak financial data continues to come out, a lot more of the recession deniers will have to throw in the towel and take reality — including all of the recession deniers at the Federal Reserve. ”

The Atlanta Fed continues to project a  second straight month associated with negative GDP growth   in the second quarter. Currently, it projects the -1. 6% decline. It will release one more projection before the actual numbers come out. Peter said he thinks it can be around -2. That would reveal the second quarter was actually weaker than Q1.

After we got the negative GDP print out in the first quarter,   the mainstream blew it off , asserting that it was just an outlier.

“ When we end up with an even less strong number for the second one fourth, that really throws a bunch of cool water in the face of the idea that we now have a strong economy. And given how weak the Q3 data already is… We don’t have a lot of July data yet, but it’s starting to come in and what we’ve seen is pretty ugly. And it the lot of sense that the third quarter would be even lagging than the first two considering interest rates are going to be a lot more significant in the third quarter when compared with they were back then. Next week, the exact Fed is set to raise car loan interest rates 75 basis points. We will be up to 2 . 25 for you to 2 . 5%. If we happen to be in recession when rates of interest were 0. 5%, 1%, 1 . 5%, think about the level of worse that recession will most likely be when interest rates are larger. ”

In this podcast, Peter furthermore talks about the first ECB beat hike in 11 yrs, a possible top in the dollars, a possible bottom in  gold , and the problems tech companies are feeling mainly because advertisers flee.


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