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Economic Anxiety Builds with Unexpected Jump in Inflation in May; Stocks Turn Bearish

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S&P Index ytd performance in bear territory due to inflation
The S&P Index dropped 22% this year by the end-of-day Monday…a bear market

>Consumer Sentiment Hits Record Low in June

Things are changing in the economy faster now, causing a dramatic uptick in economic anxiety. The fuse was lit last Friday when the latest government data showed that inflation increased to 8.6% in May compared to last year. The reading on inflation had been widely expected by most economists to drop a point or two from the 8.3% rate of inflation reported in April. The news sent Wall Street into a tailspin as traders interpreted the increase in inflation as a heightened risk of recession.

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Mortgage Demand Drops to Its Lowest Level in 22-Years

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mortgage demand declines

Almost weekly now, we are regularly seeing new data showing the dramatic slowdown of the housing market. A case in point is the latest data from the Mortgage Bankers Association which tracks the weekly demand for mortgages for both home purchases and for refinancing. The Association reported that its index hit its lowest level in demand for mortgages in 22-years.

See more on the slide in mortgage demand

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Sales of Newly Constructed Homes Collapse in April; Odds of Recession Tick Higher

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sales of newly constructed homes collapse

Sales of newly constructed homes virtually collapsed in April in a double-digit decline that surprised economists and added to the growing evidence that the housing market is entering a downturn. This downturn in housing adds to growing concerns of a recession, as it comes on the heels of the tech industry decline, and new retailer warnings of slackening demand and supply chain driven cost increases.

See the surprising numbers out of the housing market today

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April Housing Starts Decline Again; Builder Sentiment in Steep Slide in May

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housing starts off in April; Builder sentiment slides
[PHOTO: REUTERS/Mike Blake]

In yet another sign of a slowing economy, April residential housing construction starts declined for the second straight month in a row. At the same time, the Housing Market Index, a key gauge of homebuilder confidence, collapsed in May.

See what’s going on in with housing starts & builders

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More Data Emerges That Points to a Slowing Economy

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The headquarters of Netflix is shown in Los Gatos

I’ve put together a compendium of data that emerged this week that continues to point to the reality of a slowing economy. The picture gets clearer as more economic measures, including non-traditional measures like the Fluffy Puppy Indicator and home foreclosures reinforce the thinking of economists that more drastic action by the Fed to get inflation under control may lead us into the “R” word…recession.

See my compendium of some new, and some non-traditional data on the economy

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What’s Delaying New Chip Fabs to Reinforce the Supply Chain? Yep…The Supply Chain

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chip shortages bedevil the supply chain
[Photo: AFP/Jiji]

Ever since supply chain shortages hit many industries, particularly in relation to the availability of integrated circuits or chips, there has been a massive scramble to increase capacity and to build new chip fabricating facilities (fabs) or factories. There has been a series of announcements from huge companies like Intel, Taiwan Semiconductor Manufacturing Co. (TSMC), Samsung, and others launching massive multi-billion projects to add more chip production facilities.

There’s just one problem…the equipment they need to build these facilities are themselves delayed.

See more on the supply chain shortages delaying new factories to help the supply chain

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Serve a Luxury Customer? Beware! An Alarming Red Flag Has Just Emerged

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luxury home
Beautiful luxury villa with pool by the sea

A new analysis that correlates consumer confidence by income level has produced a shocking red flag for any business that offers goods and services to the luxury customer – as do many custom integrators. Fire up your sensors and watch closely to see if clients in your market are subject to this alarming trend.

See more on a shift in the attitude of the luxury customer

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Consumer Sentiment Nears 11-Year Low; Near-Term Inflation the Bogeyman

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consumer shopping
[Photo: Reuters}

For three straight months now, consumer sentiment has declined as the world faces war in Europe, soaring global gas prices, price inflation on a wide range of consumer goods, and lingering supply chain issues. As measured by the widely followed University of Michigan Index of Consumer Sentiment released earlier this month, the index is nearing its lowest level in 11-years.

See more on the souring consumer sentiment and what it means

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Sputtering Supply Chain Takes Another Hit as China Forces Factories to Close

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Shutdowns in Shenzhen China threaten the supply chain
Shuttered buildings in Shenzhen, China on Monday [Photo: Chinatopix, via Associated Press]

Here we go again! Yet another major blow has been dealt to the supply chain, this time from another round of COVID-19 hitting China, forcing lockdowns in many critical areas of the country – including Shenzhen. You may or may not know that much of the electronics goods manufactured in China come out of the Shenzhen region – so we all have a direct connection to the impact of this development. Add to this, new reports of container costs rising again and transportation disruptions from the Russian invasion of Ukraine. What’s next?

See more on the latest supply chain disruption

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U.S. Economy Grew at Record Pace in 2021

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The U.S. economy showed great positive momentum in 2021 with the gross domestic product (GDP) growing at a record pace, recouping much of the drop in GDP in 2020. In fact, a new report from Axios shows that the current GDP growth trend is now within just 1% of the pre-pandemic trend.

See more on the economic rebound

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