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Warning Signs of US Recession: A Potential Setback for Kamala Harris


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Donald Trump has consistently argued that the economy under Joe Biden has been disastrous, and until recently, the data did not support his claim. The United States has been the fastest-growing G7 nation since the Covid pandemic, with historically low unemployment and less severe inflation compared to Europe after Russia's invasion of Ukraine. However, recent developments provide Trump with some evidence to back his argument.

 

The latest US jobs figures indicate a significant cooling of the labor market. In July, payroll growth slowed to 114,000, about half the average of 215,000 from the previous 12 months and well below economists' expectations. The unemployment rate also rose from 4.1% to 4.3%, causing alarm. Financial markets, which had bet heavily on the US economy's resilience to higher interest rates, are now worried about a potential hard landing. Concerns about the US economy cooling rapidly contributed to a 12% drop in Japan's Nikkei index.

 

The Federal Reserve's Sahm rule, a measure named after economist Claudia Sahm, gauges whether the US economy is in recession. According to this rule, if the three-month moving average of the unemployment rate is 0.5 percentage points or more above its low over the previous 12 months, the economy is in the early months of recession.

 

The recent jobless report from the Bureau of Labor Statistics indicates that the Sahm rule is close to being triggered. Unless the unemployment rate falls, the rule will be met next month. Historically, the Sahm rule has been a reliable predictor of impending US recessions, prompting some to argue that the Federal Reserve has delayed cutting interest rates for too long. Speculation has arisen that the Fed might announce an emergency rate cut before its next scheduled meeting.

 

However, some economists caution against relying too heavily on the Sahm rule. Dhaval Joshi, an analyst at BCA Research, notes an unprecedented decoupling between robust economic growth and rising unemployment. Unlike in the past 60 years, when an increase in the unemployment rate by 0.5% in a year signaled a recession, current GDP growth remains strong. Joshi attributes the rising unemployment not to widespread layoffs but to an increase in labor supply outpacing labor demand. He suggests that the stock market, particularly tech stocks exposed to the artificial intelligence boom, is more vulnerable to a recession than the real economy.

 

In addition to rising unemployment, other economic indicators pose challenges for Kamala Harris as she counters Trump's critiques of the administration's economic performance. For example, the performance of UPS, often seen as a barometer of the US economy, fell short of analysts' estimates last month, leading the company to lower its growth forecasts for 2024.

 

With the presidential election only three months away, the US economy is not on the brink of an immediate recession. However, signs of households cutting back on spending spell trouble for Harris, the Democratic presidential hopeful. The cooling labor market and other economic indicators provide Trump with ammunition to argue that Biden's economic policies have failed, potentially swaying voters as the election approaches.

 

Credit: The Guardian  2024-08-06

 

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22 minutes ago, Tug said:

I think they are clamoring for an interest rate reduction.

No doubt about it:


Private equity firms are sitting on more than $2tn of dry powder — capital that has been committed, but not yet deployed in investments, according to data provider Preqin. “

 

 

 

https://www.ft.com/content/a2c22d6d-aa52-47d5-8415-542027ee33e5?accessToken=zwAGHvsXBvdIkdOiwi1tqlJH1dOEFVQgJ-4z5Q.MEUCIGVjQbYBU-aEs7B9SJo6lmV71ncNZ-dhyxlQH8x_WzGgAiEA2T1ioSVijRDDb4x_3Ut8_n65-OjhXVgTCTCMEtBpoMU&sharetype=gift&token=ce45edfa-8dce-4799-b711-f9aa7db79952

Edited by Chomper Higgot
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19 minutes ago, impulse said:

Assuming you know how to read a graph, what does it mean when the slope of the curve increases like it has post-Covid.  You know...  On Biden's watch...

debt.jpg.9d62871ac577a7a1ee45c7fdec2767cc.jpg

 

https://fred.stlouisfed.org/series/GFDEBTN/

 

It's not difficult to explain Trump's numbers, since the slope of the curve only matched Obama's line, until Covid.

Why the insult?your boy trump added 23% to our national debt with absolutely nothing to show for it but some stock buy backs for his cronies.I don’t have to be an office worker or school teacher to understand that and yes I can read a graph

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28 minutes ago, impulse said:

Assuming you know how to read a graph, what does it mean when the slope of the curve increases like it has post-Covid.  You know...  On Biden's watch...

debt.jpg.9d62871ac577a7a1ee45c7fdec2767cc.jpg

 

https://fred.stlouisfed.org/series/GFDEBTN/

 

It's not difficult to explain Trump's numbers, since the slope of the curve only matched Obama's line, until Covid.

It means obviously that both Republicans and Democrats are to blame.  Total borrowing under the Trump administration was 8.1 trillion. Under Biden, it's been 4.3 trillion. Minus the Covid spending, Trump still increased the debt by 4.8 trillion, 2 trillion of that was for tax cuts that he didn't pay for (and which he's promising more of). (All figures from Fox news)

 

More importantly, it was Reagan who started the paradigm of ignoring the debt problem as he increased spending while cutting taxes. The debt was only 780 billion when he took office. It rose to 1.6 trillion by the time he left.

 

If you're counting on Trump to the cut the deficit, you're delusional. If you're expecting fiscal responsibility from either party or the FED, you're also delusional.

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I distinctly remember when Reagan was questioned about increasing spending and cutting taxes his reply was voodoo economics…..thats not panning out so well it seems.I was watching the news they were saying what started this downturn was the Nikkei market apparently the interest free money is drying up and investors that were heavily leveraged had to sell …..or something like that ,well over my pay grade hopefully it gets resolved without further damage the Nikkei dumped 20% of its value!yeiks!!

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6 hours ago, jaywalker2 said:

Donald Trump increased the debt by 7 trillion, George W Bush by 4 trillion. But the grandaddy of them all was Ronald Reagan, who increased the national debt by 160 percent. Now, I wonder what those 3 have in common.

 

Common to these is that they are all going to be less that what Bidenomics will cost.

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4 hours ago, Tug said:

I distinctly remember when Reagan was questioned about increasing spending and cutting taxes his reply was voodoo economics…..thats not panning out so well it seems.I was watching the news they were saying what started this downturn was the Nikkei market apparently the interest free money is drying up and investors that were heavily leveraged had to sell …..or something like that ,well over my pay grade hopefully it gets resolved without further damage the Nikkei dumped 20% of its value!yeiks!!

 

The Japanese did not start this. The US 2008 GFC causes were never fixed.

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6 hours ago, Tug said:

Carefull jaywalker the truth to a trump supporter is like ray orbison music to the martins in that cult classic movie mars attacks!lol all being said I hope the market resolves itself and everything works out for everyone!

 

Slim Whitman was the man..

 

 

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11 hours ago, novacova said:

The dems are fiscal derelicts that have no interest whatsoever in reducing the debt, they want to crush the economy and destroy the middle class in order to have a government take over of the economy and impose a socialist economic system. The only way out of this mess is to drill oil on federal land sell on open market globally and pay down the debt with the profits. That would not only reduce the national debt, it would also reduce global inflation and the green wokenuts will also have more money to spend on battery powered vehicles. But for whatever reason, the left is hell bent on transferring all the wealth to the super rich and bring further disparity to everyone else. 

Where don't you get your news from?

U.S. Oil And Gas Production Are Ahead Of Last Year’s Record Pace

Last year marked a record for U.S. oil production with an average daily production of 12.93 million barrels per day (BPD). That record was 5% greater than the previous record of 12.31 million bpd set in 2019.

However, current data from the Energy Information Administration (EIA) shows that average daily production thus far in 2024 is 13.12 million bpd — 7.1% ahead of the production level of a year ago and 1.4% higher than last year’s record pace.

U.S. natural gas production tells a similar tale. 

https://www.forbes.com/sites/rrapier/2024/04/26/us-oil-and-gas-production-are-ahead-of-last-years-record-pace/

image.png.f7b76f83cf5eb472f85c0f6abd2ecde5.png

https://fred.stlouisfed.org/series/DCOILWTICO

 

What do you think would  be the effect on oil and gas prices if the US greatly accelerated production of oil and gas? Not exactly an effective way to pay down the debt. 

As for Democrats' war on the middle class...it's not Democrats who have massively slashed taxes on the wealthy. Or who consistently try to undermine Social Security. The latest attack goes to the Trump administrationh which changed the way inflation was computed with the result that benefits to the elderly are lower. The Republicans also opposing measure to impose the Social Security Tax on higher levels of income. And have no problem with leaving millions of Americans with no affordable access to health insurance.

 

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1 minute ago, placeholder said:

Where don't you get your news from?

U.S. Oil And Gas Production Are Ahead Of Last Year’s Record Pace

Last year marked a record for U.S. oil production with an average daily production of 12.93 million barrels per day (BPD). That record was 5% greater than the previous record of 12.31 million bpd set in 2019.

However, current data from the Energy Information Administration (EIA) shows that average daily production thus far in 2024 is 13.12 million bpd — 7.1% ahead of the production level of a year ago and 1.4% higher than last year’s record pace.

U.S. natural gas production tells a similar tale. 

https://www.forbes.com/sites/rrapier/2024/04/26/us-oil-and-gas-production-are-ahead-of-last-years-record-pace/

image.png.f7b76f83cf5eb472f85c0f6abd2ecde5.png

https://fred.stlouisfed.org/series/DCOILWTICO

 

What do you think would  be the effect on oil and gas prices if the US greatly accelerated production of oil and gas? Not exactly an effective way to pay down the debt. 

As for Democrats' war on the middle class...it's not Democrats who have massively slashed taxes on the wealthy. Or who consistently try to undermine Social Security. The latest attack goes to the Trump administrationh which changed the way inflation was computed with the result that benefits to the elderly are lower. The Republicans also opposing measure to impose the Social Security Tax on higher levels of income. And have no problem with leaving millions of Americans with no affordable access to health insurance.

 

So much for Biden's promises to cut fossil fuels, what a liar. 

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1 minute ago, Roo Island said:

This might help educate you. Probably not. But best to read behind the headlines. Especially when coming from dodgy media outlets

 

https://www.pbs.org/newshour/show/bidens-complex-relationship-with-oil-and-gas-despite-campaign-promises

 

 

Biden promised to cut fossil fuel production.

 

Fossil fuel production in the US just hit an all-time high.

 

You can link to whatever you like, but Biden is a liar. 

 

 

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13 hours ago, JonnyF said:

Good old Bidenomics coming home to roost just in time.

 

Thanks Joe. 

As the Noble Memorial Economics prize winner Paul Samuelson once remarked, "The stock market has predicted nine out of the last five recessions."

https://quoteinvestigator.com/2023/11/01/predict-nine/?amp=1

 

So this sharp drop is hardly conclusive.

 

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13 hours ago, JonnyF said:

Good old Bidenomics coming home to roost just in time.

 

Thanks Joe. 

More concerned about everybody stayin Woke! An eleven year old would run a lemonade stand better than her!
 

Her # 1 experience , activist & Social justice warrior!

 

bidens vision of a new generation of leader.

 

 

https://www.foxnews.com/politics/harris-says-everybody-needs-woke-unearthed-clip-spreading-like-wildfire-social-media

 

Edited by riclag
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6 hours ago, nauseus said:

 

Slim Whitman was the man..

 

 

I gave it a laughing emoji mate! Second time in 11 years i used it for it’s intended purpose!

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2 hours ago, Dan747 said:

Voting Kamala? This is the Marxist you're voting for: Decriminalize illegals (citizenship & voting); Abolish ICE; Defund police; Voting from jail; Free transgender surgery for prisoners; End cash bail; Mandate gun buyback; Palestinian statehood; Universal Basic Income; Reparations; Single Payer Healthcare; Abolish private insurance; 70-80% income tax; Abortion to birth federal law; Opposes voter ID; Elimination of the filibuster; Ban fracking; Endorses Green New Deal; Ban plastic straws; Abolish gas cars by 2035; Outlaw gas appliances.

You’ll fit in right nice Dan!

 

Welcome !

nice comment too 

 

You’ll get my support with emoji’s and a occasional agreeing comment!

 

Edited by riclag
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13 hours ago, novacova said:

The dems are fiscal derelicts that have no interest whatsoever in reducing the debt, they want to crush the economy and destroy the middle class in order to have a government take over of the economy and impose a socialist economic system. The only way out of this mess is to drill oil on federal land sell on open market globally and pay down the debt with the profits. That would not only reduce the national debt, it would also reduce global inflation and the green wokenuts will also have more money to spend on battery powered vehicles. But for whatever reason, the left is hell bent on transferring all the wealth to the super rich and bring further disparity to everyone else. 

It would also help Social Security’s destruction, by paying down the debts 

 

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