The train wreck known as the Trump Administration is beginning to impact
the well being of the nation with emphasis given to the economy at large.
To whit.
First, the good news: There is no solid evidence right now that the economy is in recession, or even particularly close to it.
The bad news is that warning bells of what is to come are ringing every which way.
The big picture: The cautions about the outlook keep piling on top of each other, including from surveys of consumers and businesses, corporate earnings, and financial markets.
It all suggests that the economic ground may — emphasis on may — be shifting beneath our feet.
But the evidence so far is all in the realm of anecdotes, or "soft data," not the kind of definitive, "hard data" evidence of a downturn that would make economists believe a recession is commencing.
Zoom out: A confluence of forces emanating from Washington is driving the vibe shift.
The threat of new tariffs far larger than those enacted in the previous Trump term is part of it, as is the erratic, on-again/off-again pattern through which they are being implemented.
Cuts to the federal workforce and government contracting may be leading some wary consumers to slow their spending (as is already evident in credit card data for the Washington, D.C. area).
It all adds a layer of uncertainty for companies trying to decide whether to engage in new capital spending or hiring.
Zoom in: On Friday, the University of Michigan's preliminary survey of consumer sentiment for March plunged for the third straight month, showing sharply lower expectations for the future among Democrats and Republicans alike.
Thursday, the S&P 500 fell into official correction territory — a 10% drop from its peak. (It rebounded sharply on Friday, however).
Leaders of businesses large and small are showing less confidence in the outlook, per surveys.
Warnings have percolated from airlines and retailers, including Dollar General and Walmart, about underwhelming consumer demand.
Announced layoffs reached their highest levels since the summer of 2020, when the pandemic was in full force — and highest for the month of February since 2009, per outplacement firm Challenger Gray & Christmas.
Between the lines: Any one of these developments can, and generally should, be chalked up to the ebb and flow of data.
This equates to a hedge, does it not?
Cloud Line
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