The True Economic Condition of the U.S.

While President Trump’s economic push and speeches have generated much enthusiasm in the stock market and tens of thousands of manufacturing jobs in and around the nation, there are hard figures that show that the country’s true economic condition may be worse than people realize.

In fact, there are many arguments to be made that in numerous ways, the country is worse off now than it was last year. Here are 11 facts that point to an upcoming economic catastrophe:

  1. Retail Closings Are Up

Until this year, the highest number of retail store closings in America happened in the last year of a fiscal crisis — 2008. In that year, 6,183 stores both large and small shut their doors. However, this year is on track to easily surpass that, with some analysts predicting the number of closed establishments will be 8,000 or more. That includes big-box stores, warehouse outlets, small retailers and everything in-between.

Some of those retail establishments may be chains — Sears alone has announced the closings of some 150 of its locations while J.C. Penney has announced it will shutter 138 — while others may be Mom-and-Pops. But the message is clear: retail is taking a beating.

Some of this can explicitly be blamed on online shopping sites such as Amazon.com and AliExpress. But more forebodingly, some of it may simply be due to the fact that Americans have less disposable income to spend, and some surveys say that as many as 26 percent of all Americans can essentially only afford to shop for food and absolute necessities (and a smaller figure may not even be able to afford those).

  1. Retail Bankruptcies Are Up

While every year for the last 20-odd years, one major retail chain or another has gone out of business (some years, it’s been many more than one), but now, the pace seems to be increasing. Last year it was The Limited, Sports Authority and Aeropostale. This year so far, Bebe and Kenneth Cole have said they’re shuttering their physical stores in favor of an online presence — but how large and long-lasting that presence will be is still undefined.

Electronics retailer Radio Shack declared its second bankruptcy in as many years as it struggles to compete with online outlets and more modern competitors. Analysts are concerned about Sears and J.C. Penney being able to have enough cash on hand to buy inventory in the future — a worrying proposition that could see these century-old American mainstays disappear from the national landscape forever.

  1. Retail Space Is Staying Vacant

The record for the most retail space going vacant in the last two decades was 115 million square feet in 2001. But 2017 is on track to surpass that, with analysts saying that as much as 147 million square feet of space could be made vacant by the end of the year; 49 million square feet has been shut down so far.

  1. Economic Growth Is Stagnating

While the Trump administration claimed that it would like to bring America back to the levels where three percent or more economic growth per year was the norm, 2017 will likely not qualify in that regard. The Atlanta Federal Reserve Bank’s GDP Now model projects that U.S. economic growth in the first three months of 2017 will be just one-half of one percent.

Multiply that by four quarters, and the government might be lucky to claim two percent growth for the year — a far cry from the Trump administration’s hopes, and the worst year on record since the 2008 financial recession.

  1. Restaurant Revenues Are Down

Americans are eating out less than they used to. This is a bad economic sign because it’s not that people want food any less; it’s that they’ve determined they can’t afford to spend their hard-earned money on dining out. Foot traffic at restaurants around the country for March is down 3.4 percent from a year ago.

Although some eateries increased prices to make up for the loss, same-location sales still are off by 1.1 percent. In the New York-New Jersey region, the numbers are much bleaker: sales are down 4.6 percent, and foot traffic is off by 6.3 percent. February’s numbers were even worse.

  1. Factory Output Is Down

In March, factory output of the U.S. fell at its fastest pace in over two years. This is in the face of surging stocks, which is unusual because falling output usually occurs only during recessionary periods.

  1. Unemployment Is Still a Big Issue

Even though the government has released rosy new jobs data the Trump administration has touted, according to the Federal Bureau of Labor Statistics, in one out of every five American families, not a single person is employed; clearly, Trump’s efforts at creating new jobs have a long way to go.

  1. Government Revenues Are Down

The money the government is taking in continues to drop and fell in March by the largest amount since the 2008 recession. This, too, is not a good sign; if people and businesses were really making more money, the government would be as well.

While IRS figures for the 2016 tax year won’t be finalized until later in 2017, this trend does not bode well, especially in the face of increased defense spending that’s part of the budget President Trump sent to Congress.

  1. Auto Sales Are Down

Nearly all automakers reported disappointing March sales numbers, and inventory levels are higher than at any point since the 2008 recession. People might be feeling good about the economy, but hesitancy to make big purchases is usually a reflection of funds lacking in bank accounts (as well as a lack of confidence about future earnings).

  1. Price of Used Cars Have Fallen Precipitously

The prices of used vehicles are absolutely crashing, while subprime auto loans have inflicted the highest loss levels since the 2008 recession. This ties into the related point below.

  1. Most U.S. Consumers Are Tapped Out Credit-Wise

According to a report on CNN, nearly six in 10 Americans cannot cover a $500 emergency expense. This hand-to-mouth existence makes the entire economy extremely fragile and magnifies the effects of sudden downturns, disasters and layoffs.

The International Monetary Fund (IMF) says that bad debt held by American corporations may reach $4 trillion — nearly a quarter of those firms’ assets. This typically undermines financial stability. The IMF additionally says that the percentage of “challenged,” “vulnerable” or “weak” debt held by these companies is nearly at levels seen just prior to the 2008 financial crisis.

Adding to all these factors is the possibility of a government shutdown — either immediately, in May or later this year. Should such an event come to pass — depending on its duration — all of the above conditions are only likely to get worse.

If there’s any good news in all of this, it’s that some of the above can still be blamed on the last presidential administration, rather than the current one. It may still be possible to turn around much of the above with enough effort. But for the Trump administration, more of a push needs to be put into creating funds rather than spending them. Conflicts in global hotspots are surer ways to drain the U.S. Treasury than almost any other.

It’s easy to talk about good news, as we saw during the last presidency, but making it actually happen is another matter entirely. For President Trump, much work remains to be done.


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