ChangeWave Research is out via e-mail today with their latest survey of business conditions. It is consistent with a new cyclical downturn or at best yet another "growth recession". They have a pretty good history for accuracy from my 4-5 year history with them. Their data are consistent with the pro-secure income thesis I have been propounding in one way or another since last May. Here is the summary:
Summary of Key Findings
Slowdown in Growth for U.S. Economy
2nd Quarter Sales
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| Just 20% of respondents say their 2nd Quarter sales will come in Above Plan – 4-pts lower than the previous quarter |
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| 30% say their 2Q sales will come in Below Plan – also 4-pts worse than previously |
Reduced Visibility for 3rd Quarter Sales Pipeline
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| Only 21% project their sales for the coming 3rd Quarter will come in Above Plan – 7-pts less than previously |
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| 20% say they'll come in Below Plan – 5-pts worse than previously |
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3Q Cap Spending Also Registers Downturn
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| Only 10% see an increase in their 3Q cap spending – 3-pts worse than previously |
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| 16% project a decrease in their 3Q capital budgets – 4-pts worse than last quarter |
U.S. Job Market
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| 19% see more new hires in their company this quarter – up 1-pt since previously |
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| 14% see less new hires – but that's 1-pt worse |
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Other Economic Indicators
Slowing Economy Helps Bring Down Inflation
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| Just 15% say prices are rising for their company's products – down 5-pts from previous quarter |
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| 16% say prices are falling – up 2-pts |
Slight Improvement in Availability of Credit for U.S. Businesses
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| 7% say it's easier for their company to borrow money than it was 90 days ago – unchanged from previously |
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| And while 12% say it's harder – that's 1-pt better |
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These survey numbers don’t seem that bad to me. Only 20-30% not looking so good in the near future means 70-80% not so bad.
ReplyDeleteBullandBearWise.com, 35 indicators, are way up and their unspecified moving average has turned up. Maybe they weight each item incorrectly, I don’t know. Though when I see a high or low number in anything I think it is likely to reverse. So I am not saying I think the economy isn’t going to slow down.
Fed funds are low and there is a decent yield curve upward slope. I don’t hear anything about credit default spreads being high.
While just now breaking the ice, destructive public employee unions are at least on the defensive. It would not take a whole lot of supply side reforms and fiscal and monetary responsibility to create a positive psychology in the U.S. Throw in a little energy policy here, and a little health care reform there, and things could seem a lot better.
Given the high correlation between Western Europe's economies and that of the U.S., what bothers me is the real possibility that this is the start of a trend. The spreading U.S. recession engulfed the rest of the world in 2008. Europe is big enough to have a similar effect.
ReplyDeleteU.S., what bothers me is the real possibility that this is the start of a trend. The spreading U.S. recession engulfed the rest of the world in 2008. Europe is big enough to have a similar effect. Stock Market
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