Thought for the day

US Economy in July: Teetering on the Brink of Recession

12 August 2022
Business activity indicators all remain close to the 50 "no growth" line. Business Confidence is actually sitting right on the 50 no-growth fence. Both Sales and Market Growth Indexes fell in July, the former just below and the latter just above 50. The Staffing Index rose sharply year-on-year, but remained at a lowly reading of 48.1. The overall Sales Managers Index remained marginally under the 50 no growth line. Prices continue to rise, but at a rapidly diminishing rate, perhaps the most encouraging sign this month

The US economy is very slowly tipping into recession according to the latest (July) data from the Sales Managers Monthly survey.

Sales managers are very much the "front line" in terms of sensitivity to changing business conditions. Sensitive to contractual negotiations being deliberately slowed down.

Sensitive to expected contracts "in the bag" being suddenly cancelled. And most of all sensitive to "budgetary problems" being increasingly cited as reasons for sales negotiations faltering.

All of these conditions are present today in many markets leading to the July Sales Managers Index remaining below the no-growth line. Very little general good news is apparent from the survey, although some sectors of economic activity continue to thrive, and price pressures do at last seem to be moderating. See more data...

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