January Auto Sales Point To Bleak Future For U.S. Economy

John Whitefoot: Despite assurances from analysts, economists, and central bankers, the U.S. economy isn’t faring so well—and the markets are finally beginning to see what we’ve been warning about in these pages all last year.


For sustainable growth, the U.S. economy needs to be reporting consistently strong fiscals. But it isn’t. For starters, the key stock indices, a reflection of the U.S. economy, have extended their sharp January losses. The S&P 500 is down 5.6% year-to-date, the Dow Jones Industrial Average has lost more than seven percent of its value so far this year, the NYSE is down roughly six percent, and the NASDAQ is in the red by four percent.


Every quarter since the beginning of 2013, an increasingly larger number of S&P 500-listed companies have revised their quarterly earnings lower. During the first quarter of 2013, the number stood at 78%. This time around, 81% of S&P 500 companies have revised their first-quarter earnings lower.


Why the big losses? That depends on whom you talk to. The Bank of America, without even a hint of a smirk, blames the much colder-than-expected weather for the weak U.S. economy, meaning the U.S. economy and global markets are performing poorly because of a snow storm…


I suggest the U.S. economy is doing poorly and the U.S. markets are tanking for entirely different reasons. For starters, the U.S. economy needs steady jobs and earnings growth. Instead, the U.S. economy is facing high unemployment and stagnant wages. For the week ended January 25, jobless claims jumped more than forecast to a seasonally adjusted 348,000.


And a record number of Americans rely on food stamps. Interestingly, for the first time ever, working-age Americans make up the majority of recipients. As expected, U.S. consumer confidence “unexpectedly” declined in January to 80.4 from 82.5 in December.


The ISM Manufacturing Index was forecast to come in at 56.2 in January, down slightly from the 57.0 reading in December. Instead, it came in at 51.3, far below estimates. (A reading over 50.0 indicates expansion, while a reading below indicates contraction.)


(...)Click here to continue reading the original ETFDailyNews.com article: January Auto Sales Point To Bleak Future For U.S. Economy [Ford Motor Company, General Motors Company, Toyota Motor Corp (ADR)]
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