Recession Indicators Flashing as Business Expenditures Fall in US


Real Vision co-founder Raoul Pal provides a unique look at the evolving global economy in his latest piece. Investing in 2019 comes with a ton of caveats, from central banks stepping into the equity markets to artificially low-interest rates. Pal believes a massive recession may be looming as increasing vulnerability reveals cracks in the current expansion.

Global Business Cycle Slowing

By asking the questions that matter most for markets, Real Vision addresses them with some of the world’s most insightful investors and analysts.

Pal is concerned that,

“All parts of the economy are showing evidence of weakness.”

A bold statement, but take a look at the data for yourself. Remember, just because something is weakening, doesn’t mean it isn’t still expanding, just to a lesser degree.

Pal looks at Cass Freight Index Shipments which are currently declining massively year over year. U.S. capital goods new orders are also falling. US car sales, restaurant sales, and US retail sales, specifically for clothes, are also declining. For those who continue to point to the low unemployment numbers, Pal reminds viewers that unemployment is “the most lagging of all indicators.”

Pal points to a weaker consumer and growing weakness in business expenditures. Could this combo lead to the first recession in over a decade? The US remains in the longest economic expansion in modern history. With President Trump’s re-election less than 15 months away, one can imagine the pressure on the Fed and other policy members to keep the US economy expanding.

Today’s video includes compiled from videos that were previously released on Real Vision, we hear from experts including John Burbank, Kiril Sokoloff, Josh Wolfe, and Greg Weldon.

After citing slowdowns in China and Europe, Pal explains that “…based on the data the whole world looks to be rolling over at once…”

Finally, debt and demographics are at the core of Raoul’s thesis. Whatever happens, understanding the potential risks is a must for any self-directed investors.