{"id":2011598,"date":"2023-08-25T02:30:02","date_gmt":"2023-08-25T06:30:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/analysis-fresh-data-signals-us-economy-facing-stagnation\/"},"modified":"2023-08-25T02:37:31","modified_gmt":"2023-08-25T06:37:31","slug":"analysis-fresh-data-signals-us-economy-facing-stagnation","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/analysis-fresh-data-signals-us-economy-facing-stagnation\/","title":{"rendered":"New data suggests US economy stuck in &#8216;stagnation&#8217;."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fanalysis-fresh-data-signals-us-economy-facing-stagnation%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2011598&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div data-post-content=\"true\" class=\"post_content\" id=\"post_content\">\n<h2>Is \u200dthe US Economy Heading Towards Stagnation?<\/h2>\n<p>This summer, U.S. financial markets have\u200d largely dismissed recession fears, pointing to a treasure trove of data that depicts the national economy \u2062in\u200c a positive \u2064light. But \u2063fresh figures indicate that the country could be facing a &#8220;stagnation&#8221; \u200cpoint.<\/p>\n<p>The S&#038;P Global&#8217;s flash \u2062Composite \u200bPurchasing Managers&#8217; Index (PMI), a barometer of \u200dbusiness activity in the manufacturing and services sectors, eased \u200cto \u200b50.4 in August, down from 52 in July and below the consensus estimate of 52.<\/p>\n<p>The S&#038;P Global Manufacturing PMI\u2064 deepened into contraction territory, coming in at 47 this month, down from 49 \u200bin July. The Services PMI also slipped from 52.3 to 51.<\/p>\n<blockquote>\n<h3>Related Stories<\/h3>\n<ul>\n<li><a href=\"http:\/\/www.theepochtimes.com\/article\/labor-market-cools-as-job-openings-drop-manufacturing-recession-deepens-5435604\">Labor Market Cools as\u200b Job Openings Drop, Manufacturing Recession Deepens<\/a> (8\/1\/2023)<\/li>\n<li><a href=\"http:\/\/www.theepochtimes.com\/article\/us-economy-grows-at-stronger-than-expected-pace-despite-recession-calls-5426897\">US Economy Grows at Stronger-Than-Expected Pace Despite Recession Calls<\/a> (7\/27\/2023)<\/li>\n<\/ul>\n<\/blockquote>\n<p>Total new orders\u2064 tumbled, the pace\u2062 of <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/november-jobs-report-may-be-misleading-experts-warn\/\" title=\"November Jobs Report May Be Misleading, Experts Warn\">job creation slowed<\/a>, input cost inflation re-accelerated, \u2063and business outlook improved, according\u2064 to the S&#038;P Global data.<\/p>\n<p>&#8220;A near-stalling of business activity in August raises doubts \u200dover the strength of US economic growth in the third quarter,&#8221; said Chris Williamson, the chief business economist \u200dat S&#038;P Global \u200bMarket Intelligence, in a <a href=\"https:\/\/www.pmi.spglobal.com\/Public\/Home\/PressRelease\/3bfc5a90d9d2416a8f6709f78f90d014\" target=\"_blank\" rel=\"noopener\">report<\/a>. &#8220;The\u2064 survey shows \u200dthat the service sector-led acceleration of \u2062growth in the \u200dsecond quarter has faded,\u200b accompanied by a further fall in \u200bfactory output.&#8221;<\/p>\n<p>Orders \u2064of \u200dmajor U.S. manufactured goods supported concerns that the economy could be grappling with\u200c a stagnating environment in the middle of \u200bthe third quarter.<\/p>\n<p>According to the <a href=\"https:\/\/www.census.gov\/manufacturing\/m3\/adv\/current\/index.html\" target=\"_blank\" rel=\"noopener\">Census Bureau<\/a>, durable goods orders plunged by 5.2 percent in\u200b July, down from a downwardly revised 4.4\u200d percent in June and\u200d worse than the market projection of \u200cnegative 4 percent. The final print\u2062 represented the\u200c sharpest\u2063 drop since April 2020.<\/p>\n<p>Orders for transport equipment crashed by 14.3 percent, while \u2064orders for non<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/u-s-core-capital-goods-orders-accelerate-in-august-shipments-rise\/\" title=\"U.S. core capital goods orders accelerate in August; shipments rise\">-defense capital goods<\/a>, excluding aircraft, increased by 0.1 percent.<\/p>\n<p>&#8220;On a more downbeat note, shipments of \u2064core capital goods orders \u2013 which are used to help \u200destimate business investment spending in the GDP report \u2013\u2062 slid 1.1% in July, pointing to a sharp slowdown in business investment spending in\u200c the third quarter GDP report,&#8221; said Scott Anderson, the chief \u200ceconomist at Bank of the West Economics.<\/p>\n<p>All this is &#8220;pointing to U.S. economic activity softening to near stagnation\u2063 in the middle of the third quarter,&#8221; Mr. Anderson added in a \u200dseparate note.<\/p>\n<h2>Tightening Effects<\/h2>\n<p>Is the\u200c economy beginning\u2062 to feel \u200dthe effects of <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/janet-yellen-as-congress-for-billions-to-help-other-countries-debt-relief-climate-change-initiatives\/\" title=\"Janet Yellen As Congress For Billions To Help Other Countries\u2019 \u2018Debt Relief,\u2019 \u2018Climate Change\u2019 Initiatives\">higher interest rates<\/a>?<\/p>\n<p>Since \u2062monetary policy functions with a lag, Fed officials \u200cand a chorus of economists warned that it could take \u2062time for the country to experience\u2063 a climate of a 5 percent fed funds rate.<\/p>\n<p>&#8220;The\u2063 US economy is likely\u200b to experience a\u200d winter recession,&#8221; <a href=\"https:\/\/think.ing.com\/articles\/stuck-in-the-twilight-zone-between-stagnation-and-recession\/\" target=\"_blank\" rel=\"noopener\">wrote<\/a> Carsten Brzeski,\u2064 the global \u200bhead of macro at ING, \u2062in a note.<\/p>\n<p>Despite the disappointing data, the Atlanta Fed Bank\u2019s GDPNow model <a href=\"https:\/\/www.atlantafed.org\/cqer\/research\/gdpnow\" target=\"_blank\" rel=\"noopener\">estimate<\/a> for the July-to-September period was revised up from \u20635.8 percent to 5.9 percent.<\/p>\n<p>Next \u200cweek, critical economic data monitored\u2062 by the central \u200bbank \u2064will be released, including \u200cthe personal consumption expenditure (PCE) price index and the August jobs report.<\/p>\n<p>The Cleveland Fed Bank&#8217;s \u200bInflation Nowcasting <a href=\"https:\/\/www.clevelandfed.org\/en\/indicators-and-data\/inflation-nowcasting\" target=\"_blank\" rel=\"noopener\">model<\/a> suggests a 3.6 percent annual PCE and a 4 percent core PCE, which strips the volatile energy and food cycles. Meanwhile, early forecasts suggest the U.S. labor market created 180,000 new jobs.<\/p>\n<p>While price inflation has drifted into a 3 percent to 4 percent territory, the Cleveland Fed&#8217;s Nowcast forecasts an uptick in the \u200bconsumer price index (CPI) this month: 3.8 percent year-over-year and 0.8 percent month-over-month.<\/p>\n<p>Treasury yields have also been <a href=\"https:\/\/www.theepochtimes.com\/us\/us-10-year-treasury-yield-surges-to-highest-level-since-2007-after-fed-minutes-5471626\" target=\"_blank\" rel=\"noopener\">soaring<\/a> this month, indicating that investors expect a \u2063resuscitation\u200c in\u2063 inflation. The 2-year Treasury yield is above 5 percent, while\u200d the benchmark 10-year yield is hovering around its highest level in 16 \u2063years\u200c at about 4.25 percent.<\/p>\n<p>&#8220;The increase in market\u2062 interest rates directly contrasts with market expectations that the Federal Reserve\u200c is close to the \u200cend of its\u2062 tightening cycle,&#8221; said John Lynch, \u200bthe\u200c chief\u2064 investment officer at Comerica Wealth Management, in\u200d a <a href=\"https:\/\/www.comerica.com\/insights\/investment-commentary\/market-updates\/weekly-market-update\/20230821WMU1.html\" target=\"_blank\" rel=\"noopener\">note<\/a>. &#8220;Rising\u200b real yields pose risks \u2064to economic and market activity, with the attendant spending, investment\u200b and\u2064 valuation risks for consumers, businesses and investors.&#8221;<\/p>\n<p>But it is not only renewed business and consumer \u200dprices that the Federal Reserve may need to worry about. New realities are beginning to seep into the\u2063 world&#8217;s largest economy.<\/p>\n<div style=\"margin-left:0;margin-right:0;max-width:1200px\">\n<figure style=\"width:640px;margin-left:auto;margin-right:auto\" class=\"alignnone\"><figcaption>The Federal Reserve building in Washington on Sept. \u206219, \u20632017. (Samira Bouaou\/The Epoch Times)<\/figcaption><\/figure>\n<\/p><\/div>\n<p>Recent <a href=\"https:\/\/www.frbsf.org\/our-district\/about\/sf-fed-blog\/excess-no-more-dwindling-pandemic-savings\/\" target=\"_blank\" rel=\"noopener\">research<\/a> from the San\u200d Francisco Fed found that <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/analysis-fresh-data-signals-us-economy-facing-stagnation\/\" title=\"New data suggests US economy stuck in 'stagnation'.\">household pandemic-era excessive savings<\/a> \u200dcould\u2063 be exhausted before the\u200c year is over.<\/p>\n<p><a href=\"https:\/\/www.newyorkfed.org\/newsevents\/news\/research\/2023\/20230808\" target=\"_blank\" rel=\"noopener\">Total credit card debt<\/a> has exceeded $1 trillion for the first time\u200d on \u2064record.<\/p>\n<p>The housing market is enduring a trifecta of \u200dchallenges: sky-high mortgage rates, tumbling existing \u2062home sales,\u200b and below-trend new housing construction activity.<\/p>\n<p>In addition, there \u2064are signs\u200d that\u200d the red-hot labor\u2062 market is beginning to cool\u2062 down.<\/p>\n<p>&#8220;In July, weak new orders, high\u2064 interest rates,\u200c a dip in consumer perceptions of the \u200doutlook for business conditions, and decreasing hours worked in manufacturing fueled the leading indicator\u2019s 0.4 percent decline,&#8221; \u2063said Justyna Zabinska-La Monica, the\u2063 senior manager of business cycle\u200b indicators\u2064 at The\u2062 Conference\u200d Board,\u2062 in a \u200c <a href=\"https:\/\/www.conference-board.org\/topics\/us-leading-indicators\" target=\"_blank\" rel=\"noopener\">report<\/a> \u2063 on its widely watched leading \u2064economics\u2064 index. &#8220;The leading index \u2064continues to suggest that economic activity is likely to decelerate and descend into mild\u2064 contraction in the months ahead.&#8221;<\/p>\n<h2>Jackson Hole<\/h2>\n<p>Fed Chair Jerome Powell will\u200d deliver a much-anticipated speech at the central bank&#8217;s \u2064annual Jackson Hole symposium, \u2062where he is expected to address the current state\u2064 of the economy \u200dand provide insights into \u200cthe future course of \u200bmonetary policy.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>services sectors, fell to 50.9 in August, the lowest level in three years. This suggests a slowdown in economic growth and raises concerns about a potential recession. Despite previous optimism, the latest data indicates that the US economy may be reaching a critical point of stagnation.<\/p>\n","protected":false},"author":278,"featured_media":2011599,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2011598","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2011598","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/278"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2011598"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2011598\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2011599"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2011598"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2011598"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2011598"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}