Omens Of Another Recession? Durable Goods Orders Drop Sharply
In a bad omen for the economy, “durable-goods orders” sank “13.2% in August,” far more than economists “had expected.” “Bookings also fell for machinery, computers and primary metals in another sign the U.S. manufacturing sector has softened considerably . . .Orders for durable goods . . . provide a good idea of how fast the economy is growing. Orders . . . droop when the economy falters.”
“GDP growth for the second quarter was revised down to 1.25%,” notes AEI’s James Pethokoukis. “U.S. economic growth is dangerously slow,” he observed: “research from the Fed . . . finds that since 1947, when two-quarter annualized real GDP growth falls below 2%, recession follows within a year 48% of the time. And when year-over-year real GDP growth falls below 2%, recession follows within a year 70% of the time.” The “bottom line” is that the economy is “slow enough to signal about a 50% chance of a recession within a year.” Here is a “taste of what economists are saying: ‘It’s all unraveling this morning.’ . . ‘the downward revision to GDP and the chillingly large drop in Durable goods orders is enough to send chills up your spine’. . . . ‘nothing there is reassuring.'”
The Obama administration has created a political climate that discourages businesses from expanding and creating jobs. Obamacare’s burdens on employers may eventually eliminate as many as 800,000 jobs. Obamacare has caused layoffs in the medical device industry, and wiped out jobs in other industries. The Dodd-Frank Act has also wiped out thousands of jobs and driven thousands more jobs overseas.
The Obama administration has discouraged hiring by interfering with employers’ merit-based hiring, and by imposing a wide array of costly, harmful new labor and employment rules on American manufacturers. The Obama EEOC sued Pepsi for doing criminal background checks on job applicants, forcing it to pay $3.1 million to settle the lawsuit. The EEOC is also threatening employers who require high-school diplomas with lawsuits under the ADA. And a hotel chain was recently compelled to pay $132,500 for dismissing an autistic desk clerk who did not do his job properly, in order for it avoid a lawsuit by the EEOC that would have cost it much more than that to defend. The EEOC has sued companies that quite reasonably refuse to employ truck drivers with a history of heavy drinking, even though companies that hire them will be sued under state personal-injury laws when they have an accident.
Even some liberal businessmen have grown disenchanted as administration policies and red tape hamper the economy. For example, Steve Wynn called Obama “the greatest wet blanket to business and progress and job creation in my lifetime.”