In an article I wrote last week about how Trump’s trade war with China and other economic policies are bad for business and bad for labor, I provided evidence showing how he was driving the economy off a cliff into the abyss of a recession.
Warning signs of the coming Trump recession are easy to spot for those who have eyes to see and ears to hear:
- The yield curve inversion in the bond market. These inversions have accurately predicted the last five recessions
- Economic uncertainty created by Trump’s trade war is depressing business investments and economic growth
- Economic uncertainty is also responsible for a drop in job creation to the lowest levels since January 2018
Even as Trump writes off this bad news with tweets accusing the Federal Reserve and the “Fake-News” media of being responsible for his failed economic policies and the coming recession, manufacturing — a segment of the economy he specifically promised would benefit from his trade war — just delivered a dose of economic reality to the tariff king.
U.S. manufacturer job growth slowed to its lowest level in 10 years in August, signaling a downturn in this vital sector. The U.S. manufacturing purchasing managers’ index (PMI) was 49.9, down from 50.4 in July, and below the neutral 50.0 threshold for the first time since September 2009, according to an initial survey by analysts at IHS Markit. Final numbers from the survey will be released on September 3.
The survey also showed new orders received by manufacturers dropped the most in 10 years, and export sales have tanked to the lowest level since August 2009.
According to Tim Moore, economics associate director at Markit, the warning signs predicting a Trump recession are pretty accurate and are responsible for the manufacturing slowdown:
“Manufacturing companies continued to feel the impact of slowing global economic conditions. August’s survey data provides a clear signal that economic growth has continued to soften in the third quarter.
“The most concerning aspect of the latest data is a slowdown in new business growth to its weakest in a decade, driven by a sharp loss of momentum across the service sector. Survey respondents commented on a headwind from subdued corporate spending as softer growth expectations at home and internationally encouraged tighter budget setting.”
Amazingly, Trump and the GOP have decided to stop trying to convince Americans that the trade war is “good and easy to win.” Turning lemons into lemonade — or is it oranges into orange Kool-Aid? — Republicans are embracing Trumpism and declaring the trade war a victory worthy of your vote in 2020.
In a display of the kind of political elitism we’ve come to expect from our Washington overlords, the economic hardships created by their failed policies are dismissed as a temporary inconvenience, only to be replaced with a “no pain/no gain” policy where everyday Americans are chastised for their unwillingness to make the sacrifices Republicans feel are necessary to win the trade war Trump says we’re already winning.
Just think of the Economic Utopia the trade war could create . . . if only we weren’t so selfish.
David Leach is the owner of The Strident Conservative.
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