The U.S. Economy Appears To Be The Last Domino To Fall

A week ago, Japan's GDP data confirmed it was heading into a recession.

Now the Eurozone's economic data (courtesy of Alhambra investments) appears to illustrate a recession is imminent. Also, fresh images from China reflect a false economic narrative. While stabilization, was expected in the Eurozone, all the numbers for the finish of 2019 keep turning up as appalling. The thought had been that trade turmoil only affected manufacturing and only had to do with exports.

But the worldwide trade downturn has sapped most if not the entirety of Europe's growth. What is seen is how retail trade was unaffected until August and September.

Like industrial production and construction, retail made an awful turn in the last month of the year. This is all before we get to the numbers reflecting the fallout from COVID-19. In China, not only are the PMIs reflecting a collapse in current economic activity, we can see from NASA images the reality of China's 'official' return to production. In Guangzhou, Shanghai, and Chengdu, there's a clear pattern – air pollution is only 20-50% of the historical average.

This implies that human activities such as traffic and industrial production within/close to those cities are actually running 50-80% below their potential capacity.