The US economic recovery is stalling, and economic growth is beginning to reverse.
Last week, initial jobless claims broke a 15-week streak of lower claims, as new concerns the labor recovery has hit a snag.
JPMorgan Chase recently said, "Chase card spending suggests recovery has stalled" and "data through July 18, our tracker of spending by a panel of 30 million Chase credit and debit cardholders are little changed since late June, suggesting that the rapid economic rebound was seen in May and early June has lost momentum."
Readers may recall the economy is facing fiscal cliffs which could cause consumption to crash, with four particular areas of focus:
- expiration of extended unemployment insurance,
- the fading support from stimulus checks,
- exhaustion of PPP
- stress from state and local aid gov'ts.
Besides a fiscal cliff, at least ten million Americans saw rent moratoriums expire last Friday. This means landlords can now file eviction paperwork for tenants who haven't paid rent for 30 days, and or, as we've noted, some folks haven't paid in months. While it's customary renters get 30 days notice, an eviction wave could be ahead.
Goldman Sach's latest recovery tracker shows 80% of the US population are in regions where the recovery has paused or reversed, due to a rise in coronavirus cases and deaths.
The Trump administration was out on Sunday morning, making their pump rounds on mainstream media outlets, indicating a "V-shaped" recovery is ahead, and more direct deposits are coming for consumers.
This all suggests stabilization in the economy thanks to trillions of dollars in fiscal and monetary injections are quickly wearing off, as it now appears there will be no V-shaped recovery. Take a look at the economic surprise index, it's ready to move lower.
Searching for clues about a reversing recovery and crisis reemerging, Twitter handle "Alastair Williamson" posted a video of what appears to be a Baltimore food bank line at the Maryland State Fairgrounds.
Williamson said, "behind the scenes: a "massive food bank line" is what one official told me."
behind the scenes: a “massive food bank line” is what one official told me pic.twitter.com/MPktSSx46Y— Alastair Williamson (@StockBoardAsset) July 26, 2020
He tweets a video of what appears to be a line of cars of "hungry and broke families" in front of refrigerated trucks.
behind the scenes: food bank line in Baltimore just getting started - a lot of hungry and broke families as fiscal cliff begins pic.twitter.com/30C1OBJDSP— Alastair Williamson (@StockBoardAsset) July 26, 2020
Williamson tweets several images of empty commercial retail space, as he describes it as a "CRE apocalypse." He said the "fiscal cliff hitting, permanent job loss, recovery stalled in late June" is creating a perfect storm in Baltimore.
The recovery has stalled; a crisis in households is reemerging while Wall Street is partying with record-high stock prices as the Trump administration and Federal Reserve bailed out corporate elites. We did some digging, and the food bank line is happening in a wealthy suburban area!
The economic crisis is far from over.