US Economy On The Brink...


 
The US Sales Managers Survey results for July look bleak. The monthly Sales Managers Survey shows Business Confidence at a near 5 year low in July, and illustrates an almost continuous fall in the "animal spirits" since the arrival of Trump in November 2024. The fall in confidence reflects the chaos produced by the erratic economic policy changes seen over the past few months, but now go further and suggest the US economy may be about to slip into recession.

Business Confidence plumbs the depths at a 57-month low
Diffusion Indexes: 50 = ‘no growth’
US Economy On The Brink...




SALES: The Market Growth Index continues its long decline, and in June is now at a 30 month low, a reflection of general conditions faced by sales managers.

JOBS: The Jobs Index is now way below the 50 "no change" line, with a July Index reading of 45.7, a 34-month low. Official US survey data shows a less dismal picture, but are based on results stemming from a much lower survey response rate than was the case pre Covid, and therefore are necessarily less reliable. The Sales Managers data is based on a regular panel (rather than a survey) of executives which tends to vary much less in response rate terms.

PRICES: The danger of inflation persists with a July Price Inflation reading much too high for comfort, particularly in view of the fact that Sales Managers antenna are rather more sensitive to price changes than those of may other occupations, as they see customer reactions to price changes at close quarters.

OVERALL PICTURE: The Sales Managers Index, made up of aggregated data from panelists on all subjects, doesn't brighten the picture. The Headline Sales Managers Index remains at a 57 month low of 48.8.

Results for any one month can be affected by a variety of factors, but the cohesion of these results does suggest the US economy is now suffering from a severe fall in confidence relating to the future, or "animal spirits" as economists sometimes refer to the invisible but important threads that increase or depress economic activity.

In summary, there is little doubt that the continuous stream of edicts pouring out of the US President's office are causing uncertainty in the business community on a scale never before seen outside wartime. Unless the uncertainty diminishes, a recession in economic activity is likely to result.


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