“The US manufacturing sector contracted unexpectedly this month as factory activity fell to its slowest pace in nearly three years… The poor performance underlined economists’ fears that the sector could be sliding into recession.” -Financial Times, Feb. 1, 2007
“US unemployment rate rose this month as the economy added fewer jobs than expected…” -Financial Times, Feb. 2, 2007
“The market can no longer assume 10% earnings growth every quarter. Growth could slow to, or below, the long-term trend of near 7%. The long run of double-digit earnings growth is over…” -Briefing.com, Feb. 5, 2007
“The number of homes in the United States foreclosed by lenders rose 42 percent in 2006 from a year earlier in a sign that many homeowners have became overextended in mortgage debt” -Reuters, Jan. 25, 2007
“Construction activity showed further weakness as spending on homes dropped for a record eighth consecutive month.” -AP, Jan. 3, 2007
Chicken Smith View:
Don’t be fooled into thinking that because this has all been said (and happened) before and our economy has always bounced back, that it will be the case this time. Manufacturing and Construction account for nearly half of US GDP, both of those sectors are currently in a downward spiral and the bottom has yet to be reached.
Jobs, not just blue-collar jobs, white collar jobs are being outsourced left and right. American industries are losing sales to foreign companies. Housing is down and will remain there for some time.
The dollar is losing its value relative to other world currencies and soon will purchase much less even here at home. Other nations are losing their faith in the dollar as the defacto currency of choice and are trading it in for Euros. Our long-standing position at the top of the mound is no longer guaranteed, other nations will soon join or replace us.
What to do? It looks like the only thing that will pull us out of this, will be what made us great in the first place… hard work, dedication, entrepreneurial will, a collective sense of pride, and respect for one another and the law. Oh yeah, and we need to moderate outsourcing, curtail corporate greed, stop frivilous lawsuits, cut our addiction to spending on credit, cut our dependence on oil, lower taxes, reduce spending on frivolous government programs, lower CO2 emissions, and practice what we preach.