Is A Recession Looming? These Troubling Statistics Are Cause For Concern.

Throughout 2023, economists were warning that a recession was coming. Although we weathered stubborn inflation and rising interest rates, the economy’s foundation remained steady and we’ve avoided a recession … at least for now.

Things seem to be changing

One metric by which experts can gauge whether a recession is imminent involves consumer habits. When people are spending less money, that’s a bad sign for the health of the economy.

And the most recent stats show that consumer spending is slowing down, and that could put a damper on hopes for a “soft landing,” the term used to describe getting inflation back down to a manageable rate without sinking into a recession.

Here are a few highlights (or lowlights, if you will) from recent reports.

• Retail sales were flat in April, but analysts expected about 0.4% growth.
• March growth was revised down from 0.7% to 0.6%.
• Personal savings rates dipped to 3.2% in March, two points lower than a year earlier.
• Household debt increased to $17.6 trillion in the first quarter, its highest level ever.
• About 9% of credit card loans and 8% of car loans have become delinquent.

With two-thirds of middle-class Americans saying their income isn’t keeping up with inflation and three-fourths cutting back on discretionary spending, it doesn’t look like the trend is reversing anytime soon.

Reading the economic tea leaves

There’s no doubt that economists are painting a far less rosy picture of the future than they were a few months ago. David Rosenberg, for example, described retail sales as “sluggish with a capital ‘S’” and said these numbers “suggest the economy has been far less strong than previously displayed.”

Even though a recession isn’t officially here, it’s impossible to ignore the mounting concerns that we’re headed for a “hard landing.”

Chris Agee May 17th, 2024

Share this story: