8 Other Signs of Impending Double-Dip Recession

Quarterly results of most of the companies in the US seem to be quite fascinating. However, shrinking economic numbers of the nation is still a concern. All major indicators are pointing towards an economy that’s falling apart. Here are some of the reasons why we might face another recession soon:

1. Economists expected rise in US orders of durable goods by 1%. However, it fell by 1% in June. Apart from volatile transportation goods’ figures, overall shipments fell by over 1.3%. The quantity of inventories lying in warehouses is increasing, which indicates goods are being manufactured but not purchased by consumers.
   
2. Chinese industrial output fell by more than 2.8% last month, major reason being weakening global economic conditions.
3. According to the data revealed by Economic Cycle Research Institute (ECRI), the weekly indicator index fell significantly, reaching as low as -10.5. This has never happened in the past, not even during 2008 recession.
4. Growth Index, as reported by The Consumer Metrics Institute, has not everbeen in positive figures since January 2010, and it has now reached -3.0. In August 2008, this index had reached -6.0, lowest since the great depression.
5. In May 2010, the US trade deficit increased becoming the largest one in past 18 months, in spite of decrease in oil imports by over 9%. This trade deficit is subtracted from GDP. Usually, increase in oil imports is one of the most dreadful concerns. In this case, even reduction in imports seems to be a futile attempt.
6. US Consumer Index too continues to fall in July, after a sharp drop in June. A robust economy must have consumer index more than 90. However, as of today, it’s just 50.4. Before the 2008 recession took place, consumer spending amounted to 72% of GDP.
7. Weekly unemployment claims in the US is steady at 400,000, which is the divider between recession and non-recession. These claims did not rise even during the recovery period. Contradictory to recent increase in companies’ profits, more and more workers continue to lose their jobs.
8. Ben Bernanke, Fed Chief, finally agreed the US economy is in bad shape. However, we can expect it to be much worse as he didn’t predict or even notice the arrival of recent sub-prime crisis, nor did he realize it till spring of 2008. So, if he now believes the economy is falling apart, it would be much worse.

Many economists are still optimistic, and believe these figures are simply due to the after-effects. Instead of improving, however, these numbers are worsening, and we can only hope someone notices them.