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Societe Generale Strategist Warns US Near Recession

from TRU News:

Societe Generale strategist Albert Edwards says weak domestic consumption may soon plunge the US economy into recession.

Edwards: “The only thing keeping the US out of recession is the US consumer. It is difficult to say consumption is driving the economy forward; rather it is like a wood, worm-ridden crutch creaking under the strain of holding up a dead weight economy. This recovery, the fourth longest in history, is surely nearing its end.”

“This support is about to be kicked away.”

“Current trend resembles 2007.”


“One key and imminent risk for the consumer is a rapid pick-up in headline CPI inflation as the weak oil price of H2 last year starts to drop out of the yoy calculations.”

“Headline CPI inflation is set to rise rapidly from the one percent where it has hovered for the past six months and to converge with core CPI, standing at 2.25 percent.”

“That will sap some 1.25 percent from real personal disposable income growth, which will decelerate rapidly, removing the key prop for recent moderate robust consumption growth.”

Consumption makes up 70 percent of the US GDP.

(VERO BEACH, FL) The American economy may soon plunge into recession, as consumer strength is showing signs of weakening, says Societe Generale strategist Albert Edwards. Consumption makes up 70 percent of the US gross domestic product.

However, this support is “about to be kicked away,” the analyst said.

“The only thing keeping the US out of recession is the US consumer. It is difficult to say consumption is driving the economy forward; rather it is like a wood, worm-ridden crutch creaking under the strain of holding up a dead weight economy. This recovery, the fourth longest in history, is surely nearing its end,” Edwards wrote, quoted by Business Insider.

According him, the current trend resembles 2007, when robust consumption tempered economic contraction in the first quarter, but by November the economy fell into recession.

Growing inflation and higher prices will make consumers more cautious about their purchases, Edwards said.

“One key and imminent risk for the consumer is a rapid pick-up in headline CPI inflation as the weak oil price of H2 last year starts to drop out of the yoy calculations. Headline CPI inflation is set to rise rapidly from the one percent where it has hovered for the past six months and to converge with core CPI, standing at 2.25 percent. That will sap some 1.25 percent from real personal disposable income growth, which will decelerate rapidly, removing the key prop for recent moderate robust consumption growth.”

Read More @ TRUNews.com

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4 comments to Societe Generale Strategist Warns US Near Recession

  • Craig Escaped Detroit

    I have to laugh at these deluded, denial freaks who cannot see the obvious.

    Saying that we may be “near a recession” is the same as Nuclear energy spokesmen saying that “Fukushima may be about to be leaking some bits of radiation in the near future”.

    When I step out of my house and get DRENCHED with rain, I do NOT say, “Hey, it looks like we might a chance of getting some rain.”

    • Ed_B

      Agreed. Near a recession? WTF? We’ve been in a damned depression since 2008. Recession my patootie. Recessions last 10-12 months and when they end, lots of good jobs are created. Heard of any GOOD jobs coming along lately? Depressions last for a decade, sometimes more. Well, let’s see… we’ve been in this crap for 8 years now. Hmmm. Recession? Oh, hell no, not even close! And all the funny numbers in the world won’t make this sow’s ear of an economy into a prosperous silk purse.

  • NIX

    Near does’nt mean close just to clarify !!

  • tomche

    Near!!?? Bwahahahahaaaaaa…..idiots.

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