Economic Indicators Turn from Confusing to Ominous: Numerous economic indicators suggest that the U.S. economy is contracting and that conditions might get much worse

American Thinker ^ | 08/02/2024 | S.T. Karnick

[SeekAndFind]

Federal Reserve (Fed) chairman Jerome Powell’s Wednesday announcement that the central bank might start lowering interest rates in September sets the stage for a potential reversal of the longstanding pattern of inconsistent and contradictory indicators from the economy.

Unfortunately, that change may not be for the better, with a conservative September interest rate cut of 0.25 percent being too small and arriving too late to do much good.

Additionally, the central bank said it will continue reducing its balance sheet by selling Treasury securities, agency debt, and agency mortgage‑backed securities, which tightens the money supply. Scarcer money is more costly.

Markets have been waiting for an interest rate cut for several months. The Fed, for its part, has been awaiting bad economic news before daring to reduce the federal funds rate, lest it set off a new round of price inflation. In addition to lower price inflation, the Fed has been looking for higher unemployment, slowing gross domestic product (GDP), stock market losses, and other signs of economic misery. The central bank talking about reducing interest rates is a clue that the economy is not in good shape.

Many economists have been predicting a recession for months on end in the wake of the rapid interest rate increases of March 2022 through July 2023, which the Fed has held steady ever since.

The doomsayers are not wrong, though the downturn has been very late in arriving. The bizarre government actions perpetrated during the COVID-19 pandemic distorted the economy so greatly and created such strange conditions that restoration of normal cause-and-effect relationships of government fiscal and monetary policy on the economy has been much slower than expected.

Nonetheless, the laws of economics have not been repealed.

[pburgh01]

We need more Negro women...or half Negro!

[livius]

Conditions will get worse. I live in a tourist town and we are having way low numbers of visitors.

The shutdown almost killed a lot of places (thanks, Trump...maybe you should have ignored Fauci rather than making him defacto President) but they were starting to come back.

But this has stopped. I was in Europe a couple of weeks ago, and it was definitely not hopping with tourists or even locals in the restaurants.

Now inflation is hitting everybody and they just can’t afford travel or dining, and any even modest expenditure has surged in price...and our governments are so opposed to freedom of movement that they are happy to make it increasingly difficult and expensive to travel, go outside of our 15 minute cities, or eat anything except what they wan us to eat.

Soon even the modest good life will be only for the elites (of which we will not be members).

[packagingguy]

Here in Branson, MO to take my kid on vacation. It’s not very busy here.

We are probably in a recession.

[Ge0ffrey]

(thanks, Trump...maybe you should have ignored Fauci rather than making him defacto President)

Trump did that? Not in my state of South Carolina. We closed down for two weeks and reopened again. What state do you live in?

[TornadoAlley3]

Trump needs to say something about this latest jobs report.

[TornadoAlley3]

Hospitality and service industries are not hiring. It’s nationwide

[griswold3]

We tried to tell the people Bidenomics will destroy the middle class. Another “Progressive” tale of Wall Street not Main street. Small businesses are suffering. We need real agency not more government intervention.

[umbagi]

In my little corner of the Texas hill country, both the sheriff and the police chief announced that they didn’t have the resources to police lockdowns and masking, so folks mostly ignored it.

[CodeToad]

The economy cannot possibly be bad when so many people spend more on food delivery than on getting their own food.