U.S. Recession Risk

[errolanderson]

U.S. revised 1st quarter GDP released this morning at -.07%.

Canada's 1st quarter GDP revised to 0.6%.

Right now, Canada's economy is doing better than the American despite oil price turn-down. But full impact of oil price fallout may not be felt until the 3rd quarter.

U.S. 2nd quarter growth to date also showing weakness. Chances of a U.S. Fed rate hike in 2015 appear quite remote despite recent Yellen comments.

Bank of Canada held its rate at 0.75% which will be as good as it gets for some time. Lower BOC rates possible into 2016 (IMO).

[foragefarmer]

From the numbers I'm reading, Canada's economy is worst than USA

April 2015 Unemployment rate in Canada 6.8%

2015 Canada GDP according to IMF 2.2%

GDP contraction of .06% way worse than what had been projected by Bank of Canada .

April Unemployment rate in USA 5.5%

2015 USA GDP according to IMF 3.1

[boarderbloke]

Just to clarify,

U.S. revised 1st quarter GDP downward 0.9%, from initial estimate of 0.2% positive growth stated earlier, revised now to growth of -0.7%(negative growth)

Errol, isn't two consecutive quarters of negative growth considered a recession?

Knowing how the obama administration has been fiddling with the unemployment numbers to paint a more favorable picture, one has to wonder just how bad GDP numbers are skewed as well. very scary times.

[errolanderson]

boarder . . . U.S. is likely in-recession already. Yes, 2 quarters negative is considered a recession.

Yellen and the media trying the tell the public the opposite. Fed is on real rocky ground. They are damned if they increase rates and they are damned if they do nothing. But Wall Street bubble is now a real risk for the Fed.

But they are builders of their own nest, which is now a mess.

[cottonpicken]

Personally believe the numbers are a little better then the reported but they need ammo to keep the qe going because there is no going back

[ajl]

With Alberta sputtering pretty sure Canada is in recession as well. They seem to make a hundred revision per quarter to the data so hard to tell. Bottom line: there is not going to be enough growth to service the gargantuan debt so default, confiscation, money printing, and austerity will be the norm in the future delivering vastly lower living standards.

[errolanderson]

cotton . . . central bank intervention is what's buggering theses markets up. QE does nothing to generate economic growth. Now markets are totaling out of alignment thanks to central bank policies.

Where's the end game to this mess?

The U.S. Fed is hooped (IMO).

[cottonpicken]

I agree we are in no mans land how the wheels are still on the tracks is amazing

Global debt loads cant absorb real market rates

Dont know how it plays out but doubt it will be nicely

[cottonpicken]

Imagine they did lift

Holders on the long end of the curve are screwed on price and getting out will not be as easy as getting in

Then the market crashes

Then corprate profits evaporate

Then fiscal levels of government go down the toilet

Lots of households screwed

There not doing this insanity for no reAson they have to

[errolanderson]

Released this morning, U.S. consumer spending for April was flat, the worst in three months and no weather to blame.

No Fed rate hike for June. And Janet Yellen isn't attending the annual meeting of global central bankers in Jackson Hole.

Consumer spending stateside appears in decline.