We continue to get more numbers that indicate that U.S. economic activity is really starting to slow down. According to Challenger, Gray & Christmas, the number of layoffs in the United States was 38 percent higher in August than it was in July. A 38 percent increase in one month is more than just a little bit startling, and many believe that if this momentum continues we could soon be facing an avalanche of job losses similar to what we witnessed in 2008. And without a doubt, all of the other economic numbers that have been rolling in lately also confirm that the U.S. economy is heading into harder times. But is our country ready to handle another major economic downturn? Even though there have been moments of difficulty over the past decade, we truly haven’t seen anything like this since the last recession. In fact, the latest job cut numbers that we just got from Challenger, Gray & Christmas are the highest that we have seen during any August since 2009…
Job cuts rose 38 percent over July, with 53,480 positions to be slashed from employer payrolls, led by workforce reductions in health care, which had been a mainstay of recent job creation, the tech sector and manufacturing.
So why is this happening? Well, certainly there are many factors at play, but Andrew Challenger has singled out “the trade war” as one of the biggest reasons.
Other nations are really starting to feel the effects of the trade war as well. This week, Germany reported a startling drop in new manufacturing orders. During the second quarter, German GDP growth fell into negative territory, and it looks like that will happen again here in the third quarter. That would mean that Germany is already in a recession right now, and that is very troubling news for all of Europe.
Here in the U.S., just about everything that we would expect to see happen just prior to the beginning of a recession is happening in textbook fashion right in front of our eyes.
In particular, the transportation industry is already mired in a very deep downturn, and we just learned that orders for heavy trucks in August were down by 80 percent compared to a year earlier.
I don’t know about you, but an 80 percent decline sure seems like an awfully big red flag to me.
Overall, it is still being projected that the U.S. economy will stay out of contraction territory in the third quarter, but GDP forecasts have continued to slip.
The gap between the “haves” and the “have nots” continues to grow in our country, and that has dire implications for our future. If those with money and power continue to have a “let them eat cake” attitude about all of this, eventually we will see chaos in our streets, and this is something that Umair Haque recently discussed… How can the economy be “strong” when 40% of people are struggling to eat? Isn’t that a little bit like the Hunger Games actually coming to life? Is that where America is now? What on earth?
hink about the fact itself for a second, before we discuss it — 40% of people in the world’s richest country struggle to afford food. It’s a “Let Them Eat Cake” moment happening before our eyes. How much more Versailles can you get? There’s nothing — nothing — more basic than being able to afford food. When a society can’t provide food for its people, it’s one of the most severe and fundamental indicators that something’s badly, badly wrong. More government handouts are certainly not the answer. The U.S. government already hands out money and benefits to more than 100 million people every month, and yet our problems just continue to escalate.
And now it appears that we are heading into a new economic crisis. The job losses are likely to escalate in the months ahead, and many believe that the economic pain that we will experience will be even greater than what we experienced during the last financial crisis.
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