Wednesday, January 27, 2016

Data That Suggest a Coming Recession

Merrill Matthews

There are several reasons to think the U.S. may soon enter a recession.
  • Manufacturing has been slowing down.  The Institute for Supply Management’s well-respected Purchasing Managers Index (PMI) has been trending down since October 2014.  However, it crossed into negative territory last November, indicating a real slowdown in manufacturing.
  • U.S. exports have been declining for several months, in part because of the rising strength of the dollar but also because many other economies are slowing.  If U.S. companies aren’t selling their goods and services, they will have to scale back operations.
  • And increasingly economists are warning that very low oil prices could lead us into a recession because the hard-hit energy sector is responsible for so much investment in the economy and high-paying jobs.
But here’s an indicator you may not have heard about: declining median income......
 

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