The U.S. Economy Is Starting To Slow Down Dramatically

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The pace at which economic conditions are deteriorating is shocking the experts. Just a few months ago, authorities were saying everything was under control and things would soon start improving again. But since the start of 2022, a major shift has taken place. Most of the headlines have been about the highest consumer prices in decades and how poorly American families are faring in this economy. To make things worse, huge stock market declines and a cooling housing market are having a major impact on our economic activity. At this point, consumers can’t afford to meet their basic needs. Home sales and auto sales are dropping like a rock, business bankruptcies, layoffs, and unemployment claims are ticking back up, and the U.S. middle-class continues to get squeezed.
At this point, a series of new Fed surveys are showing that manufacturing activity in the U.S. is dramatically slowing down. A new report released by the Richmond Fed indicated that factory activity contracted in the U.S. last month, with the Fifth District Survey of Manufacturing Activity index dropping 23 points from a positive reading of 14 in the month prior to a minus nine, the lowest reading since May 2020, when much of the economy was still suffering from business shutdowns. In a separate report, the New York Fed’s Empire State survey of manufacturing showed that business activity sharply plunged in June. The index of general business conditions fell 36.2 points to a negative reading of 11.6 last month. “New orders declined and fell into negative territory. Shipments fell at the fastest pace since early in the pandemic and also turned negative. Both the prices paid and prices received indexes are still elevated, indicating strong inflationary pressures remain despite the slowdown in orders,” the report revealed.
New data shows that the U.S. economy has shrunk at an even faster rate than expected during the first quarter of 2022. The Bureau of Economic Analysis’s third and final estimate of first-quarter GDP was released on Wednesday morning, and it showed a 1.6% annualized drop in economic growth in the first three months of 2022, more than the 1.4% previously reported and which was expected by economists, according to estimates from Bloomberg. “The economy is slowly sliding in the direction of weakness as consumers are buying less to keep GDP afloat,” FWDBONDS Chief Economist Christopher Rupkey stressed in a note. Right now, optimism is being replaced by a growing feeling of frustration and disbelief as more and more people started realizing that the economic downturn that is now upon us will ultimately be even worse than what we experienced a decade ago.
Most of us are working as hard as we can, but our living standards continue to be systematically destroyed by rampant inflation, soaring everyday expenses, rising mortgage rates, crashing financial markets, and the reckless policies of our leaders. And the worst part of it all is that we are still only in the very early chapters of this crisis. It looks like the second half of this year will be even more turbulent than the first half, and that is going to have severe implications for all of us. For that reason, today, we gathered new numbers that show just how profound is the economic slowdown of 2022.


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