{"id":18286,"date":"2016-02-26T12:02:24","date_gmt":"2016-02-26T17:02:24","guid":{"rendered":"http:\/\/olduvai.ca\/?p=18286"},"modified":"2016-02-26T12:02:48","modified_gmt":"2016-02-26T17:02:48","slug":"is-this-the-beginning-of-the-next-recession","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=18286","title":{"rendered":"Is This the Beginning of the Next Recession?"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2016\/02\/24\/is-this-the-beginning-of-the-next-recession\/\" target=\"_blank\">Is This the Beginning of the Next Recession?<\/a><\/h3>\n<p class=\"entry-meta\"><strong>\u201cSignificant risk\u201d of \u201cfalling into contraction\u201d with \u201cworse to come.\u201d<\/strong><\/p>\n<\/header>\n<div class=\"entry-content\">\n<p>The US economy is largely service based. So when the \u201cmanufacturing renaissance\u201d and \u201con-shoring\u201d that everyone had been waiting for turned into no-shows, and when instead manufacturing started slowing in early 2015, it was no big deal, according to the meme.<\/p>\n<p>OK, it was terrible for the folks who lost their jobs. But manufacturing accounts for only 12% of the US economy and employs only about 9% of the workforce. So overall, it\u2019s not the end of the world, we heard constantly. And besides, we could always make it up with fast food.<\/p>\n<p>Manufacturing alone can\u2019t drag the US into a recession, we were assured. And the service economy would continue to be strong. That was the meme.<\/p>\n<p>Then, a few days ago, Evan Koenig, Senior Vice President at the Dallas Fed, gave a presentation that showed that manufacturing contractions preceded service contractions in the run-up of the past two recessions. When service sector growth begins to dwindle \u2013 so still growth, but slower growth \u2013 after the manufacturing sector has already begun to shrink, that\u2019s the point he called \u201cprelude to recession.\u201d And when the service sector begins to actually shrink, that event marks what officials will later call the beginning of the recession [read\u2026\u00a0\u00a0<a href=\"http:\/\/wolfstreet.com\/2016\/02\/22\/prelude-to-recession-the-dallas-feds-unsettling-charts\/\" target=\"_blank\">\u201cPrelude to Recession\u201d: the Dallas Fed\u2019s Unsettling Charts<\/a>].<\/p>\n<p>That \u201cprelude to a recession\u201d happened a few months ago. At the time, manufacturing was already shrinking; and the services index had just started heading south. But now the services index entered a contraction as well.\u00a0So\u00a0this could mark the beginning of what will much later be officially called a recession.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Is This the Beginning of the Next Recession? \u201cSignificant risk\u201d of \u201cfalling into contraction\u201d with \u201cworse to come.\u201d The US economy is largely service based. So when the \u201cmanufacturing renaissance\u201d and \u201con-shoring\u201d that everyone had been waiting for turned into no-shows, and when instead manufacturing started slowing in early 2015, it was no big deal, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[3730,12653,2813,1264,12652,841,4254,4255],"class_list":["post-18286","post","type-post","status-publish","format-standard","hentry","category-economics","tag-dallas-fed","tag-evan-koenig","tag-manufacturing","tag-recession","tag-service-economy","tag-us-economy","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18286","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18286"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18286\/revisions"}],"predecessor-version":[{"id":18288,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18286\/revisions\/18288"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18286"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18286"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18286"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}