No doubt, the latest economic data release from the Institute for Supply Management (ISM) of its manufacturing ISM was concerning, coming in at 47.2.  Any number below 50 shows contraction in that sector.  This was the 5th consecutive month below 50 for this indicator and a fresh new low.  In fact, it is the lowest print since June of 2009.  

Thankfully, the manufacturing sector of the economy is no longer large enough to drag the entire U.S. economy into recession, but, if the manufacturing ISM stays low enough for long enough, it could filter into much larger portions of the economy spelling trouble ahead.  So what are the odds of this happening?  

As you saw from my last blog post, figuring out where things are headed has become a challenge with central banks and politicians trying to control everything related to the U.S. economy.  However, I think I can provide a somewhat uplifting look ahead as it relates to this sector.  The graph below shows my manufacturing model and the manufacturing ISM.  If the future mimics the past, we may have an end in sight for this manufacturing recession.  



I will talk more about this at the ALMEdge Users Conference in April.  Keep your eyes open for the "save the date" materials from our marketing department and I hope to see you there!
 

As I was going through some data and forecasts today, it became very clear to me why trying to figure out where the U.S. economy is headed is likely an exercise in futility at this point. 

The graphs below come from the NY Fed and the Atlanta Fed.  They show what are referred to as "now casts" or real-time estimates of GDP growth for Q4 of 2019.  These are likely generated by some very smart PhD research economists that work for these Fed districts so tell me, what chance do we mere mortals have?  No wonder it's called the "dismal science." 




 

Another unicorn has appeared!  For the first time, since economic record keeping began in the U.S. (1840), the U.S. has experienced its first decade without an official recession.  Has the Fed, through growing its balance sheet to over $4 trillion, eliminated the U.S. recession forever?   Things to ponder for the ALMEdge users conference in 2020...