U.S Economy remains vulnerable

It is interesting to see the recent re-appearance of articles relating to flashing warning signals of recession (see here and here and here)

It is true that some genuinely troubling signals are starting to make themselves known. Let’s look at some of them.

Heavy Duty Truck sales, a reliable long-leading indicator for US recession, has recently tanked:

Growth in Total Freight Shipments and Revenues has been negative since early 2015::

The Inventory-to-Sales ratio was one of the first trouble spots and has persisted for quite some time now:

A composite of 35 diversified spreads from the Credit Markets is also providing a  warning:

Lending standards at financial institutions are tightening up:

The annual growth in corporate profits has been negative for six quarters now, although seems to be recovering:

Quarterly % change in Federal Tax Receipts are looking vulnerable:

A composite of various housing market indicators is left wanting, but showing signs of recovery:

The collapse in the oil price that decimated the shale gas industry has led to a well publicized¬† recession in industrial production and manufacturing…

But by far the most worrying trend, is the labor market, where a broad-based, consistently increasing weakness among the 52 US States is being masked by national numbers being touted about that include high population density states:

The prior chart that shows the average unemployment rate among the 52 states, together with the % of 52 US States with rising unemployment (now at 50%) being in far worse shape than the national unemployment rate below implies:

These are just a few indicators in a battery of twenty-one that we examine, and whilst there are no alarm bells yet, the aggregate composite of all 21 indicators shows the US economy the most vulnerable to exogenous shock since this expansion started:

About Dwaine Van Vuuren

Dwaine has a Bachelor of Science honors degree and is a full-time trader and investor. His passion for numbers and keen research & analytic ability has helped grow RecessionALERT into a company used by hundreds of hedge funds, brokerage firms and financial advisers around the world.

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