Did the U.S. economic expansion wilt this past spring, allowing another recession to take root?
Gluskin Sheff economist David Rosenberg believes it did. It isn't just that the unemployment rate bottomed out in March at 8.8%. Rosenberg notes that real disposable income, household employment, real business sales and manufacturing output all peaked that month.
Skepticism about U.S. growth is catching lately, what with Goldman Sachs and Bank of America both cutting their second- and third-quarter forecasts in recent days. UCLA economist Ed Leamer contends the recovery -- the process in which output rises faster than trend, closing the gap that opened up during the recession -- ended last summer.
But Rosenberg goes a step further, taking the second economic "soft patch" in the past year as another sign that the world's most supposedly flexible economy is stumbling toward another downturn.
"These are four critical pillars of the economy and they all peaked the same month," Rosenberg writes in a note to clients Monday. "Something tells me we are very close to a recessionary outcome here."
Of course, Rosenberg has said this before. He said last month he viewed the odds of a U.S. recession as being about 99%. But his skepticism is worth bearing in minds as other forecasters, such as BofA's Ethan Harris, continue to assume that much of the growth that went missing in the middle of this year will magically reappear in the fourth quarter.
Harris last week cut his second-quarter growth view to 1.5% from 2% and his third-quarter forecast to 2.5% from 2.9%, while boosting his fourth-quarter projection to 3.5% from 3%. Harris and others figure a Japanese economic bounce and lower energy prices will boost activity by then, and it is certainly possible that will happen. But it's hard to believe anyone can sing that song with much conviction after the downhill ride we've had most of this year.
Another recession is coming, and soon.
So says Gluskin Sheff economist David Rosenberg. Rosenberg, a longtime bear on the economy and the stock market, now says he is 99% sure we will have another recession by the end of next year.
He reasons that consumers have just begun clearing debt from their ledgers (see chart, right) and that as that deflationary process plays out, spending will slow, weighing on job growth. Adding MOREColin Barr - Jun 14, 2011 10:34 AM ET
What do surging bond prices and tumbling bank stocks tell us about the economy?
Nothing good, posits Gluskin Sheff economist David Rosenberg. He notes that over the past two months, with the stock market pushing toward its highs, the KBW bank stocks index has tumbled 12%, while 10-year Treasury yields have dropped 40 basis points to a recent 3.17%.
He says the last time these three things happened at the same time was in MOREColin Barr - May 12, 2011 10:52 AM ET
The bull market in bonds isn't dead – it's just taking a nap.
So says Gluskin Sheff economist David Rosenberg. Unlike many investment strategists, he views the recent selloff in Treasury bonds not as a sign of an inflationary fixed-income apocalypse, but as the latest opportunity to buy income-generating bonds cheaper.
What's more, Rosenberg says the current obsession with rising food and energy prices will pass -- and along with it the market support for stocks at what he MOREColin Barr - Feb 7, 2011 12:17 PM ET
Betting against the buck keeps paying off.
The dollar tumbled again Wednesday, hitting a 15-year low against the yen and a new low against the Swiss franc. The dollar index dropped to 77.7, putting it down 6% in the past month.
The dollar slid to $1.39 against the euro and 83 yen. It dropped to 96 cents on the Swiss franc, widely viewed as the soundest of the paper currencies, after trading MOREColin Barr - Oct 6, 2010 11:15 AM ET
Is the dollar about to spring off its deathbed?
A lethargic recovery and Federal Reserve promises to aid the economy have been hammering the U.S. currency lately. The dollar has lost almost 10% of its value since early June, when enthusiasm over a U.S. rebound started to wane, according to the Fed's major currencies index, and there is no shortage of voices calling for an even deeper decline.
But for MOREColin Barr - Oct 4, 2010 12:49 PM ET
Exactly how many new houses costing $750,000 or more were sold in the United States last month?
Only the government knows, and it won't tell, other than to say it's below 500. But as low as the number is, it isn't zero -- contrary to a commentary posted Thursday by Gluskin Sheff economist David Rosenberg and picked up on some popular blogs.
Rosenberg, who has presciently called for investors to buy bonds this MOREColin Barr - Aug 26, 2010 12:04 PM ET
Look out, China. U.S. households are now the second-biggest owner of Treasury debt.
The U.S. household sector bought $147 billion of Treasury securities in the first quarter, the Federal Reserve said in its quarterly flow of funds report. That pushes Americans' holdings of Treasury debt to $796 billion, the highest level since 1999.
It also vaults U.S. households past Japan to the No. 2 position among holders of full faith and credit MOREColin Barr - Jun 21, 2010 6:41 AM ET
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