Four Different Economic Indictators Point To An Economic Downturn
President Donald Trump is desperately trying to convince the American people that his is the best economy and there is no threat of a looming recession, but the facts simply do not bear out his assertions.
A Thursday report from Business Insider reveals that four of Trump’s favorite market indicators all point to an economy that is doing less “incredible” than the president is out there selling.
Some of those indicators began their decline not long after the Trump administration offered a cheery September briefing that showed the president’s economy was doing well.
Business Insider highlights four indicators: Investment in non-residential equipment, purchasing manager sentiment, small business optimism, and goods-producing employment.
Private non-residential fixed investment
The growth rate in private non-residential fixed investment — which is a “metric [that] follows money placed in property, equipment, software, and other business-related goods” — dropped to 1.4 percent in the last quarter on record.
“It represents the slowest growth in such investment in more than two years, and falls well below what the Trump administration bragged about in the September briefing,” Business Insider noted.
ISM Purchasing Managers' Index
The monthly Purchasing Managers’ Index published by the Institute for Supply Management — which “surveys purchasing managers at more than 300 manufacturers to track changes in new orders, production numbers, and inventories” — dropped from 60 percent in September to 51.2 percent as of July.
A reading above 50 percent indicates expansion in the manufacturing industry, whereas readings below the midpoint indicate a contracting industry. Business Insider noted that the latest reading “lands just above recession-level figures.”
Small Business Optimism Index
The National Federation of Independent Business’ monthly report that includes “a seasonally-adjusted small business optimism index” shows a slide beginning just after September, “from 107.9 to as low as 101.2 at the start of 2019.”
“The figure rose steadily since the start of the year, but still land well below the peaks mentioned in the administration's briefing. The Small Business Optimism Index hit 104.7 in July.”
The annual growth rate of goods-producing jobs surpassed ten-year highs in mid-2018, reaching 3.4 percent, but then fell every month since. July saw a rate of just 1.8 percent.