Most of my recent analysis has pertained to Europe.
However, on the other side of the pond, the US economy is showing major signs of deterioration.  The jobs data, even after the BLS massages it, is awful. Secondly, 1Q12 GDP estimates have been revised lower. We’ve also seen the two consecutive bad Philly Fed surveys, including the fact that the average workweek has shortened for two months now. We’re also seeing a drop in the Empire Manufacturing index.
In addition to this, we’ve seen the following companies cut their forecasts for 2012: Pall (PLL), Nucor (NUE), Ryder Systems (R), Proctor & Gamble (PG), Cardinal Health (CAH), Texas Instruments (TXN), Starbucks (SBUX), Autodesk (ADSK), FedEx (FDX), Jabil Circuit (JBL), Bed, Bath & Beyond (BBBY), and Adobe Systems (ADBE).
Many of these are economic bell-weathers. And anyone in the financial space can tell you, companies only lower their forecasts if things are going to get a lot worse (executives are highly incentivized to maintain positive outlooks for fear of their company’s shares collapsing on downgrades).
In simple terms, we’re getting many signals that the US economy may in fact be slipping into a second recession in the context of a greater DE-pression. Once it’s confirmed that we’re back in recessionary territory (we already are, but it won’t be confirmed by Government officials until after the US Presidential election) then this will mark:
- The first time in the post-war period that the US has entered a recession in which industrial production failed to exceed its previous peak:
- The first time the US entered a recession when average unemployment duration was already at record highs:
- Moreover, the civilian employment-population ratio is at levels not seen since the ’70-’80 (meaning that fewer and fewer Americans are in the workforce).
- And a recession in which food stamp usage is already near record highs:
To make matters worse, all of this is happening at a time when the US Federal Reserve, which has been the life-support for the US economy (for better or for worse), is finally discovering that its policies and theories don’t actually apply to the real world.
