US Recession Imminent As Factory Orders Plunge For 8th Consecutive Month

Tyler Durden's picture


For the 8th month in a row, US factory orders fell YoY. Down 6.2% in June, this is the longest streak of declining factory orders outside of a recession in history. MoM, factory orders rose 1.8% - as expected - the most since May 2014 but historical orders and shipments were revised lower. Much of the MoM gain was driven by a 21% rise in defense aircraft shipments. Inventories contonue to rise leaving inventories-to-shipments ratios at cycle highs.




Would have been considerably worse if not for a 21% rise in Defense aircraft orders... thank the Keynesian gods for war!!!


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Tue, 08/04/2015 - 10:10 | 6389131 JustObserving
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US Recession Imminent

Let's not forget that US inflation numbers are completely fake - so real US GDP is much, much lower.  We have been in a recession or depression since 2008:

The Chapwood Index for 2014 was 9.7% and official CPI in the land of the free was only 0.8%.  So the Nominal GDP of 5.6% for 2014 becomes real GDP of -4.1%.

The revised real GDP for years 2011 to 2013 worked out to -6.2%, -6.5%, -6.5% respectively.

What is the Chapwood Index?

"The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation."

Tue, 08/04/2015 - 10:14 | 6389150 duo
duo's picture

If one used real inflation numbers, the economoy is 20-25% smaller than it was in 2000, let alone 2007, with maybe only one real positive GDP year, 2005 or 2006, at the height of the housing  bubble.

Tue, 08/04/2015 - 10:17 | 6389158 New England Patriot
New England Patriot's picture

I didn't realize imminent meant going back seven years. 

Tue, 08/04/2015 - 10:23 | 6389174 StackShinyStuff
StackShinyStuff's picture

No no no no no NO GODDAMMIT!  It's bullish.  Always is.   Always will be.  Just BTFD.

Tue, 08/04/2015 - 10:33 | 6389214 nuubee
nuubee's picture

So I had doubts about Shadowstats, want to believe it, but have doubts. The chapwood index, however, I have a lot of trouble disbelieving. If that index is correct, then we truly have been in a depression since 2007/08. So, presuming we've been hiding our depression since then... to what ends? It seems the world was actually going fine for a while under the pretense of U.S. "Recovery", but if we hit another recession here I presume that lie will be laid bare for all to recognize.

So, to what end are we hiding our next-great-depression state?

Tue, 08/04/2015 - 10:38 | 6389230 New England Patriot
New England Patriot's picture

Keeps the guillotines quiet.

Tue, 08/04/2015 - 10:41 | 6389249 nuubee
nuubee's picture

The longer you lie to people, the greater their wrath.

Tue, 08/04/2015 - 10:46 | 6389260 gatorengineer
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no just the more extreme reality TV that you need to keep them occupied.  It will be interesting to see what they do to top Kaitlyn....

Tue, 08/04/2015 - 11:27 | 6389467 Save_America1st
Save_America1st's picture

The recessions have never ended...everything is fake and propped up with more debt.  This is a massive depression masked over by QE, EBT, and lies upon more lies of every economic statistic imaginable.


Tue, 08/04/2015 - 10:48 | 6389271 r101958
r101958's picture

Nuubee - Shadowstats is correct too.

Tue, 08/04/2015 - 10:51 | 6389283 nuubee
nuubee's picture

I'm not saying they're not, but their method makes it harder to believe them. Chapwood, however, puts the lie to power in a nearly impossible-to-deny fashion.

Tue, 08/04/2015 - 11:50 | 6389647 r101958
r101958's picture

Yes. John Williams does go into detail. He explains about hedonics etc., and yes it is difficult to fathom but we can blame the government for that. Incredibly, the govt says that when steak gets too expensive we will buy ground beef and therefore it is not considered inflation.

Tue, 08/04/2015 - 12:16 | 6389792 robertsgt40
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1958--so who can now afford ground beef/mystery meat/pink slime?

Tue, 08/04/2015 - 10:37 | 6389233 BandGap
BandGap's picture

Gosh, who got elected in 2008? Who promised to fundementally change things?

When you want to collapse a system it's best to blow sunshine uppeople's asses until you don't. It increases the shock and the willingness to do anything to restore "order".

We've been off the cliff since late 2008. Time to hand over the anvil.

Tue, 08/04/2015 - 10:46 | 6389261 firstdivision
firstdivision's picture

Don't need an index to tell me we never recovered from '08.  Just drive around with eyes wide open.

Tue, 08/04/2015 - 10:49 | 6389278 nuubee
nuubee's picture

I completely agree. I've lived in Southern California for 30 years now. The businesses that folded as a result of 2007/08 are *still* gone, those buildings they occupied are *still* empty. This has literally been normalized to this point. Even in wealthier areas, I see whole blocks that had luxury auto dealerships that have been closed for nearly a decade now. The numbers are a lie, no doubt.

Tue, 08/04/2015 - 11:20 | 6389420 Temporalist
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But you aren't counting all the Quinoa and Kale sandwich shops that opened named after Obama and Hillary.

Tue, 08/04/2015 - 20:49 | 6391875 Chuck Walla
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I remember seeing 3 blocks of dealerships all gone near San Bernardino about 3 years ago. It opened my eyes even wider than they were. If you can't sell cars in SoCal, there's a problem.



Tue, 08/04/2015 - 11:50 | 6389643 malek
malek's picture

So you're now stating what I already read between the lines for many posters here.

Can you elaborate why you found/find Shadowstats hard to believe or had doubts, but Chapwood not so much?
Because except that there are now two voices instead of a lone one, I am stumped at the perceived difference.

Tue, 08/04/2015 - 10:28 | 6389192 falconflight
falconflight's picture

I don't see why the OnePartyMedia just can't continue to claim recovery regardless of what some stats purport.  Many of the most important indicators (Labor Participation Rate, Median Income, Unemployment rate (1980 methodology), hasn't supported a recovery for 6 years and yet a sizable minority (Maybe 40%) actually believe Obama and Co has saved us from GW's "Great Recession."  I suppose if a GOProg wins the Maximum Leader position in Nov16, a recession/depression will be announced shortly thereafter...

Do you renounce you pledge of allegiance to the Fascist-Socialist Republic?

Tue, 08/04/2015 - 10:50 | 6389207 cowdiddly
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They called the last one "The Great Depression". This one has be labled as "The Great Perpetual Recovery". Perception MGNT 4401, thats upper level to you freshman and sophomoric dwebs. It has prerequisite requirements of Math 3341: Gobbels Statistical Modeling and COMM: 4201 Advanced  Propaganda Techniques. Now get another student loan and shut up and sign here.

Tue, 08/04/2015 - 11:52 | 6389660 malek
malek's picture

Not quite.

They called it depression at the time to downplay it as minor compared to regular recessions.
It only was named Great Depression after it had ended.

Tue, 08/04/2015 - 11:33 | 6389521 doctor10
doctor10's picture

"defense aircraft shipments"

at some point you gotta export stuff that contributes to a growing, developing world, rather than blowing up the world.

demand is pretty limited longterm otherwise!!


just sayin'

Tue, 08/04/2015 - 10:30 | 6389135 Dr. Engali
Dr. Engali's picture

Oh, we're upgrading from a depression to a recession?  Finally some good news.

Tue, 08/04/2015 - 10:10 | 6389136 ajkreider
ajkreider's picture

What's the statute of limitations on "recession imminent"?

Tue, 08/04/2015 - 10:10 | 6389137 pods
pods's picture

We don't have to make anything anymore. We have facebook.



Tue, 08/04/2015 - 10:26 | 6389187 SWRichmond
SWRichmond's picture


We make war.  And bubbles.  That is all.

Tue, 08/04/2015 - 11:36 | 6389534 Kprime
Kprime's picture

we throw sand in the sand box and blow bubbles with bubble mix we stole from the other kids at school.

Tue, 08/04/2015 - 10:13 | 6389145 Bill of Rights
Bill of Rights's picture

Why didn't I get my  " Before Leahman "

Tue, 08/04/2015 - 10:16 | 6389155 dcohen
dcohen's picture

Let's pretend it matters

Tue, 08/04/2015 - 10:18 | 6389162 youngman
youngman's picture

Those new f35s are ready to that is the payday I bet...

Tue, 08/04/2015 - 10:29 | 6389198 SWRichmond
SWRichmond's picture

You mean those F35's which lose dogfights to 30 year old F16's?  You mean the $1 Trillion F35 program that was an epic boondoggle?

Tue, 08/04/2015 - 10:34 | 6389211 New England Patriot
New England Patriot's picture

That's what happens when you build an F-105 Thunderchief with curves.

Tue, 08/04/2015 - 11:06 | 6389358 pods
pods's picture

I got stuck on that link for a half hour. Good stuff!  


Tue, 08/04/2015 - 11:07 | 6389366 New England Patriot
New England Patriot's picture

They're the best.

Tue, 08/04/2015 - 10:19 | 6389165 surfersd
surfersd's picture

It is not a deflationary cycle it is a free money cycle. When money is free you can drill mine explore to your hearts content. When demand falls there is no place for all that newly produced commodity to go except down. Oops. Can't wait to see the jobs reports out of the Bakken. At least the McDonald's worker (if even he is still employed) will be making $15 hr.

Tue, 08/04/2015 - 10:23 | 6389176 dobermangang
dobermangang's picture

It's the Obama economy..... This year is worse than last year, but much better than next year.

Tue, 08/04/2015 - 10:39 | 6389243 Sir SpeaksALot
Sir SpeaksALot's picture

exactly, when it comes to unfavourable categories - we should be comparing to next year, this way it will be very good for quite a long time.

Tue, 08/04/2015 - 10:25 | 6389180 Bell's 2 hearted
Bell's 2 hearted's picture

core capital goods orders revised down - again - from advance report (out july 27th)


Advance Core durable orders


april ... -0.7%

may ... -0.4%

june ... +0.9%


Full report (todays)


april ... -0.7%

may ... -0.8%

june ... +0.7%

Tue, 08/04/2015 - 10:25 | 6389182 Hunter S. Thompson
Hunter S. Thompson's picture

Does this mean a September Rate Hike?

Tue, 08/04/2015 - 10:26 | 6389186 Truth Eater
Truth Eater's picture

What is it- 3 quarters down before they declare "recession"?  And that was 8 months for June.  We just finished July.  We are HERE and we are just waiting for the liars to tell us where we are. 

They fake numbers so that even a dead company will have high stock values right up to the day its doors are locked in bankruptcy.

Tue, 08/04/2015 - 10:27 | 6389188 TheRideNeverEnds
TheRideNeverEnds's picture

Netflix doesnt need factories.  


buy buy buy!

Tue, 08/04/2015 - 10:29 | 6389197 dcohen
dcohen's picture

Netflix, Facebook, Google, Amazon need retards, and there are plenty of those around.

Tue, 08/04/2015 - 10:29 | 6389199 dontgoforit
dontgoforit's picture

Things are great.

Tue, 08/04/2015 - 10:55 | 6389300 Winston Churchill
Winston Churchill's picture

If you can't take a bad joke, you shouldn't be in manufacturing.

Thank dog I sold out in the 1980's.

Now I've got,no inventory, little overhead, and a booming biz in the middle of a depression.

Whats not to like ?

Tue, 08/04/2015 - 10:29 | 6389200 dobermangang
dobermangang's picture

It could be worse.  They're running out of beer in American liberals favorite socialist country.

Tue, 08/04/2015 - 10:30 | 6389203 madcows
madcows's picture

Markets are up based on M-o-M.

Tue, 08/04/2015 - 10:30 | 6389204 WTFRLY
WTFRLY's picture

Civil War 2 is right on time

Tue, 08/04/2015 - 10:35 | 6389220 Jethro
Jethro's picture

The Revolutionary War could be considered a civil war.  But what Yankees refer to as the Civil War was actually the War of Northern Aggression, as the South didn't try to topple the remaining government in the US, but sought to rule themselves as the CSA.

Tue, 08/04/2015 - 10:36 | 6389226 Ghordius
Ghordius's picture

I'll believe it when I see it

pardon my French, but imho it's mostly propaganda. specifically, so that a one-trillion-per-year "US Homeland Security" had a very little shred of fig leaf to hide behind

"support Homeland Security, yell the terrorist/rebel yell" could be the unofficial motto

just an alien/foreign opinion, mind you

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