"Dallas, Richmond, and Philly Fed Surveys Indicate Possible Recession"
The regional Fed surveys this week have indicated a slump in business surveys for Philly, Dallas, and Richmond, suggesting a deeper contraction. The actual CapEx is weak, new orders are plunging, and the number of employees is tumbling.
Waning Optimism
Overall, the respondents' expectations regarding future business activity reflected a decrease in optimism in August. The data supports the thesis that consumer spending is significantly reducing. There are concerns that if this decline continues at the current rate through the end of the year, it could have a significant negative impact on businesses.
Concerns About the Federal Reserve
There are concerns that the Federal Reserve has waited too long to trim rates and that by the time any future cuts begin impacting the economy, consumer spending will be at recession levels.
Inflation and Rising Costs
Despite news headlines suggesting that inflation is decreasing, the design and construction industry has not seen prices going down. Costs continue to rise while customers and prospects are continually pressuring for price decreases.
The Consumer is Hurting
Increasing personal debt along with rate uncertainty has slightly stalled activity. There are delays in purchase decisions and customers are having difficulty coming up with funds to pay for services.
Political Impact
Politics is a major issue keeping companies from making significant moves. The upcoming election will determine the course of American business for the next four years. There are concerns that the U.S. has lost its position of strength in geopolitics, and the vacuum is encouraging war and violence, which pose significant risk to international trade and reduce opportunities for U.S. companies.
Bottom Line
The overall sentiment from the regional Fed surveys suggests a possible recession on the horizon. The combination of waning optimism, concerns about the Federal Reserve, rising costs, hurting consumers, and political impact all paint a bleak picture for the U.S. economy. What are your thoughts on this? Share this article with your friends and discuss. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.
"Dallas, Richmond, and Philly Fed Surveys Indicate Possible Recession"
The regional Fed surveys this week have indicated a slump in business surveys for Philly, Dallas, and Richmond, suggesting a deeper contraction. The actual CapEx is weak, new orders are plunging, and the number of employees is tumbling.
