I’ve run across a couple of charts lately that make me a little skittish about the economy. The first is this look at the percentage change year over year in US Business sales:
Next is a look at Wholesaler sales and wholesaler inventories divided by sales:
Manufacturing orders are also solidly negative year over year, consistent with past recessions:
Recessions are notoriously hard to forecast. As economist Paul Samuelson famously wrote, “Wall Street Indexes predicted nine out of the last five recessions! And its mistakes were beauties.” Nevertheless in a financial world where assets are seemingly driven by central banks around the world, I wonder if we might start to see more signs of an impending recession without the market reacting initially as the fed put seems alive and well.
The above charts, combined with the market’s valuation levels, could certainly make for an interesting period going forward.