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!!!


Charts: Bloomberg

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JustObserving's picture
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."

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.

New England Patriot's picture

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

StackShinyStuff's picture

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

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?

nuubee's picture

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

gatorengineer's picture

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....

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.


r101958's picture

Nuubee - Shadowstats is correct too.

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.

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.

robertsgt40's picture

1958--so who can now afford ground beef/mystery meat/pink slime?

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.

firstdivision's picture

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

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.

Temporalist's picture

But you aren't counting all the Quinoa and Kale sandwich shops that opened named after Obama and Hillary.

Chuck Walla's picture

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.



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.

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?

cowdiddly's picture

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.

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.

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'

Dr. Engali's picture

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

ajkreider's picture

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

pods's picture

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



SWRichmond's picture


We make war.  And bubbles.  That is all.

Kprime's picture

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

Bill of Rights's picture

Why didn't I get my  " Before Leahman "

dcohen's picture

Let's pretend it matters

youngman's picture

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

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?

New England Patriot's picture

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

pods's picture

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


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.

dobermangang's picture

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

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.

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%

Hunter S. Thompson's picture

Does this mean a September Rate Hike?

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.

TheRideNeverEnds's picture

Netflix doesnt need factories.  


buy buy buy!

dcohen's picture

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

dontgoforit's picture

Things are great.

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 ?

madcows's picture

Markets are up based on M-o-M.

WTFRLY's picture

Civil War 2 is right on time

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.

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