Has the U.S. economy turned a corner? Yes, and then another corner and now it’s going backward. A slew of bad economic data today. A taste of what economists are saying:
– It’s all unraveling this morning. OK in the US jobless claims fell and the consumer comfort index improved. But the downward revision to GDP and the chillingly large drop in Durable goods orders is enough to send chills up your spine. Yes, aircraft and defense orders were the bulk of the weakenss. But nothing there is reassuring. Have the NFL’s replacement officials been collecting economic data? Please tell me it is so. – Economist Robert Brusca
– Durable goods headline looks like an F, details look like a D. … The latest durable goods data point to some downside risk to our GDP forecast for the third quarter, though we are leaving our GDP forecast at 1.5%. – JPMogan
– … there is growing risk that a 2013 tax shock could push the economy into recession (and there is little the Fed can do to offset the fiscal shock). – RDQ Economics
– Today’s U.S. reports included a disastrous August durable goods … the ex-air equipment orders data are now tracking a recession trajectory, which may reflect fiscal cliff uncertainty that will eventually be reversed, but which send a notable red-flag for U.S. growth. … We lowered our 1.5% GDP growth forecasts for both Q3 and Q4 to 1.4% … – Action Economics.
– A trend weakening in core business investment outlays deserves the most attention. – Citi
Then we have this recession forecast from Strategas Research:
If the above forecast is correct, the National Bureau of Economic Research might wind up declaring that the U.S. economy slipped back into recession in late 2012 even though the economy was actually not yet contracting at that point. (Here is my post from earlier on why we are in the recession red zone.)
And if that happens, economic historians might well shove aside the weak three-year recovery and call the entire 2007-2013 period the Long Recession or some such. I already have been, just like the 1980-82 period was a long recession, two downturns sandwiching a brief recovery.