Leading Economic Indicators expect Recession by year’s end

Revelations 18:23 ‘For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • U.S. Leading Economic Indicators Point to Recession Around Year’s End
  • “The US LEI declined for a fourth consecutive month suggesting economic growth is likely to slow further in the near-term as recession risks grow,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board.
  • “Consumer pessimism about future business conditions, moderating labor market conditions, falling stock prices, and weaker manufacturing new orders drove the LEI’s decline in June. The coincident economic index which rose in June suggests the economy grew through the second quarter. However, the forward-looking LEI points to a US economic downturn ahead.”
  • A US recession around the end of this year and early next is now likely. Accordingly, we’ve downgraded our forecast of 2022 annual Real GDP growth to 1.7 percent year-over-year

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Majority of Americans see Recession looming ahead

Rev 6:6 NAS “And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • 70% of Americans think a recession is coming: Here’s what they are doing to prepare
  • A recession is defined as a significant economic decline that lasts more than a few months.
  • Most Americans — 70% — already believe an economic downturn is on its way, according to a new survey from MagnifyMoney.
  • High inflation is one of the biggest risk factors that make people think an economic decline is coming, along with high housing and rent prices and rising interest rates.
  • In order to prepare for a downturn, many are focused on keeping their spending in line — 62% of respondents said they are cutting back on spending, while 39% are sticking to a budget.
  • One in 4 respondents in the MagnifyMoney survey reported paying down debt as a way to get their finances ready for an economic downturn.

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$6 Trillion in Government spending and stimulus checks was too good to be true, now we’re paying for it

Rev 6:6 NAS “And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • More Misery on the Way: Americans Can’t Afford Gas and Groceries, so Economists Say Recession Very Likely
  • With inflation now at 8.6% and food prices rising the fastest in 40 years, Americans are trying to find ways to get by, and that means less spending.
  • Credit card debt, which dropped during the pandemic as Americans used government stimulus checks to pay down balances, has rebounded to all-time highs.
  • Almost half of the economists surveyed by The Wall Street Journal say a recession is likely in the next 12 months.
  • Analyst Joel Griffith at the Heritage Foundation, has been runaway government spending.
  • “Look, we spent about 6 trillion dollars extra over the past two years than we normally spend, and nearly every last dollar of that was printed by the Fed to purchase government debt. That’s why we have inflation now”

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Bleak outlook from Poll saying 59% of Manufactures see Inflation leading to Recession

Rev 6:6 NAS “And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Poll: Nearly 60% of U.S. Manufacturers See Inflation Leading to Recession
  • Almost six in ten American manufacturers believe ongoing inflation will lead to a recession in the United States, a new survey from the National Association of Manufacturers (NAM) finds.
  • In the latest NAM survey, more than 59 percent of American manufacturers said they believe inflation is likely to spur a recession in the United States
  • 52 percent said they do not believe the Federal Reserve will be able to avert a recession

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67 percent of Americans are now dipping into savings and using credit as prices soar

Rev 6:6 NAS “And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Wall Street Sinks into Bear Market, Recession Possible as Americans Dip into Savings Just to Pay Soaring Bills
  • On Wall Street, there are growing fears a recession could be coming, and a big decision anticipated Wednesday from the Federal Reserve is causing even more concern.
  • The S&P 500, the index tied to most 401K retirement plans, finished down nearly four percent Monday and has now plunged more than 20 percent for the year
  • Inflation is pounding consumers. Everything from gas – now averaging more than $5 a gallon nationally – to groceries is going up.
  • A new survey shows 67 percent of Americans are dipping into savings to pay their bills and some are resorting to credit cards.

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CFO survey shows 68% believe recession will hit in first half of 2023

Rev 6:6 NAS “And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • The recession will hit in the first half of 2023 and the Dow is headed lower: CNBC CFO survey
  • According to the majority (68%) of CFOs responding to the survey, a recession will occur during the first half of 2023. No CFO forecast a recession any later than the second half of next year, and no CFO thinks the economy will avoid a recession.

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28% surge in individual income taxes this year

Rev 6:5,6 NCV When the Lamb opened the third seal, I heard the third living creature say, “Come!” I looked, and there before me was a black horse, and its rider held a pair of scales in his hand. Then I heard something that sounded like a voice coming from the middle of the four living creatures. The voice said, “A quart of wheat for a day’s pay, and three quarts of barley for a day’s pay, and do not damage the olive oil and wine!”

Important Takeaways:

  • Americans paying most income taxes ever
  • 28% surge in individual income taxes this year
  • Another spurt in 2025 when the Trump tax cuts expire
  • The numbers were higher than the agency predicted last year, and as the economy recovers following the virus crisis, they are expected to go further

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Everyday items, skyrocketing prices…could Recession be next?

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Record gas prices are pushing up everyday costs, dampening economic recovery
  • Americans are facing sticker shock at gas stations across the country, but surging global energy costs are rippling through the economy in other ways, too:
    • Airlines are scaling back on flights. Truckers are adding fuel surcharges. And lawn care companies and mobile dog groomers are upping their service fees.
  • The average price for a gallon of gas jumped 13% this week, according to AAA. Overall gasoline prices are up 38% from a year ago, according to the Labor Department’s latest inflation figures.
  • Goldman Sachs this week lowered its forecast for annual U.S. economic growth, citing “higher oil prices,” and said there is a risk the United States will enter a recession in the next year.

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Higher cost and lower standards of living a harbinger of a coming recession

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Retail expert warns recession just ‘around the corner’
  • You’ve go to 16.6% this year versus the 10.6, the reference the cost of every return is $33 on a $50 item, the profit out of $50 items, only $1. So the retailers are losing a fortune. So that means higher prices and lower standards of living for consumers. And that with the McDonald’s news, today is a harbinger of the recession coming more quickly around the corner.

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Brazil in recession as drought, inflation and interest rates bite

By Marcela Ayres and Camila Moreira

BRASILIA (Reuters) -Brazil’s economy contracted slightly in the three months to September, government data showed on Thursday, as surging inflation, steep interest rate hikes and a severe drought triggered a recession in Latin America’s largest economy.

The 0.1% decline in Brazil’s gross domestic product (GDP) in the third quarter, reported by official statistics agency IBGE, was below a median forecast for zero growth in a Reuters poll.

Brazil’s economic rebound from the worst of the COVID-19 pandemic has sputtered as inflation surged into double digits, forcing the central bank to raise borrowing costs aggressively despite the downturn.

Economists have said that the stubbornly high levels of inflation in Brazil have steadily eroded consumers’ purchasing power, proving a drag on the economy.

Some analysts said Thursday’s weak data may discourage the bank’s monetary policy committee, called Copom, from an even larger interest rate increase at its December meeting.

“Against this backdrop, we no longer see Copom upping the pace of monetary tightening next week,” William Jackson, chief emerging markets economist at Capital Economics, told clients in a note, forecasting another rate increase of 150 basis points.

Big rate hikes from the central bank, whose autonomy was written into Brazil’s constitution this year, are one more headwind for a weak economy, which is weighing on President Jair Bolsonaro’s popularity as he prepares to seek reelection in 2022.

Revised data showed a 0.4% drop in the second quarter, worse than the 0.1% decline reported previously. Two straight quarters of contraction meet the definition of a recession.

Unusually dry weather this year has also hurt key Brazilian crops such as corn and coffee. Vanishing reserves at hydropower dams drove up electricity costs, adding to price shocks.

Agricultural production fell 8.0% in the third quarter, while industrial output was flat and services advanced 1.1%.

Brazil’s auto industry has struggled to ramp up production amid a shortage of components such as microchips in global supply chains. Shortages have also hurt manufacturing in Mexico, whose economy contracted more than expected in the quarter.

WORSE TO COME

Some economists are warning of a deeper downturn next year.

The market outlook for 2022 economic growth has fallen from 2.3% in June to less than 0.6% in the latest central bank poll of economists, released on Monday.

Brazil’s Economy Ministry dismissed that consensus in a statement on Thursday, reaffirming its forecast of economic growth above 2% next year and pointing to recent job creation data as evidence of a resilient recovery.

Brazil’s unemployment rate fell to 12.6% in the third quarter from 14.2% in the prior quarter, data showed this week, hitting the lowest point since the beginning of the pandemic.

“The government has an obvious bias to overestimate (growth) as long as possible. But there comes a point when you can’t,” said José Francisco Gonçalves, chief economist at Banco Fator.

Compared to the third quarter of 2020, Brazil’s economy grew 4.0%, IBGE data showed, below a median forecast of 4.2% growth.

(Reporting by Marcela Ayres in Brasilia and Camila Moreira in Sao Paulo; Writing by Brad Haynes; Editing by Bernadette Baum, Daniel Flynn and Richard Chang)