It’s About to Start: Here’s Why
Experts are saying that there is no incoming recession! But in this video, Taylor Kenney dives deep into the unemployment charts to discover the truth. You’ll see what patterns are showing from the past and how our current day matches up!
TRANSCRIPT:
Hi everyone, thank you for being here. Between sky-high prices, a dying labor market, and a housing standstill, it’s no wonder that people are concerned about the economy and their personal finances. But I have amazing news: CNBC states that 59% of Americans wrongfully think the U.S. is in a recession, the report finds.
So, I guess that’s it—there is no recession. There’s nothing to worry about, and we can all sleep easy tonight. Doesn’t change the fact, of course, that no one can afford the basic cost of living. Good luck trying to find a job out there, but at least according to CNBC, we’re technically not in a recession.
Now, all jokes aside, I don’t know about you, but I am sick and tired of people trying to tell me whether or not we’re in a recession when no one even can define what it is. Classically, people have said that a recession is defined by two quarters of slowing GDP growth consecutively. But I was curious because even the White House has changed its stance on what technically defines a recession.
So, I was looking online, and I found on whitehouse.gov, right here: *How do economists determine whether the economy is in a recession?* And it says here, there really isn’t a technical way to determine if we’re in a recession. No, instead, they look at a holistic assessment of economic activity, including labor market, consumer and business spending, industrial production, and incomes.
So, based on all of this data, that’s how they’re able to make a decision. Well, I thought that was interesting because why don’t we take a look at those areas together right now and see what’s going on. Let’s look at the last couple of recessions together through the lens of unemployment because I’m seeing a pattern emerge—one that I think you would be interested in seeing as well, especially when we look at what preceded these recessions.
So here we have the unemployment rate. We’re looking at this on this chart. We’re going to start with 2001-2002. So if we zoom in here and see, obviously, when we’re looking at these gray bars, what we’re seeing is a recession, and we see that unemployment naturally goes sky-high during these time periods.
But what I’m interested in again is the six months preceding that. So if we look here, October-November, we’re seeing 3.9%. Now, as we continue to move in time, we see this jump up to 4.4% right when the recession really started getting going here, right when it’s starting.
So that was a jump of 50 basis points. Now, it’s important to note that unemployment is a lagging indicator; it doesn’t predict a recession. This is because, of course, when companies are hurting, or in pain, or nervous about what’s coming, they will start doing layoffs. They’ll freeze hiring, be more protective, but all of that is already kicking off the cycle of a recession of pain.
So what we’re seeing here, though, is this unemployment jump up leading to a recession. Now, if we go to 2008, let’s do the same thing here. And 2008, I mean, at its peak here, what do we have? 10% unemployment, so that was a significant jump up. But before we were talking about these numbers—7%, 8%, 9%, 10% unemployment—what was happening back here in 2007?
Well, the exact same thing. So if we go right here, we have 5% right when the 2008 Great Recession started, and if we go back about six months or so, here we have it. We have May 4.4% and June 4.6%. So between the two, six months earlier, we have about 50 basis points, that jump. So we see that preceding the Great Recession.
So now let’s go ahead and look at the present day. If we move up to present day, the most recent job numbers that we have are for July. August job numbers aren’t released until September. We have 4.3%. Going back about six months, January, 3.7%. That is an increase of 60 basis points.
So 4.3% on its own, the mainstream media might be saying it’s nothing crazy; it’s not the worst, it’s not that bad. But if we look at history, if we look at pattern, we can see one emerging where this could just be the beginning of what we’re going to see. This could be preceding another one of those big gray bars—another one of those recessions.
So again, maybe by some, we’re not technically in one, but the pain is already there. The pain is happening, and really, we’re just getting started. And I know someone out there is going to say, “Well, what about the GDP? The GDP is strong, that’s all that matters. All this labor stuff doesn’t make a difference.”
Well, my question to you is, what then is going on with our deficit spending? We have 6% GDP deficit spending. I mean, I have a chart right here, Federal Surplus or Deficit as a Percent of GDP. And my question to you is, if the Fed is so convinced, if the government is so convinced that the economy is strong and nothing is wrong, why are we spending like we’re heading into or we’re already in a recession?
We can see right here, 2008—mid-2008, 2009—percent of GDP spending, deficit spending was about 6%. That is what we are spending today, 6.2% of our total GDP is deficit spending. Now, we of course had 2020; we saw a ton of spending happening then. Then we saw this reduction in spend. Well, guess what? We’re back. We’re back to spending like something is going on here, right?
Something is going on. Why are we spending like we are in a recession if we’re not in one? Seems pretty simple to me. The truth is, there’s a split happening in our economy—the rich are getting richer, and the rest of us are suffering.
There’s a saying going around right now that it’s never been easier to be a billionaire, and it’s never been harder to be a millionaire. And that’s the reality. Yes, there is money to be made right now; while the sun is shining, go and make it. But you and I both know that eventually, that sun is going to set.
And what you don’t want is to be caught in a situation where you’re not prepared. Because if you’re not, the pain that is going to be felt from this recession is going to be tremendous. If we look at all the dominoes that are falling, the writing is on the wall. I mean, another one that is being considered a positive right now is consumer spending.
And I’ll be the first to admit it, that despite all the odds, consumer spending is remaining strong. But I challenge you to look a little bit deeper at what is keeping the wheels of our economy moving, because consumer spending right now is being financed by debt. It’s not just the U.S. government that has a problem with overspending; it’s the U.S. consumer.
And I mean, maybe it’s because they need to maintain their cost of living because everything’s gotten so expensive. But what we do know is that credit card debt continues to reach new highs. And in the last five years, Americans have racked up more debt than they ever have in the history of the United States.
And it’s not just the total amount of dollars that’s concerning here. When we look at U.S. household credit card balances topping out at 1.14 trillion dollars this year, it’s also the rate that these credit cards are at. We see rates have continued to climb, so now Americans have more debt that’s more expensive to finance at a time when their dollar is worth less.
This is why we’re seeing more delinquencies on the rise. This is also why we’re seeing a record number of 401k early hardship withdrawals happening across the country. What really made me sad about that is that I saw that those hardship withdrawals have jumped 40%, and the primary reason—the reason why people are doing the early hardship withdrawals—is because they’re fighting to save their homes.
Whether they can’t afford the upkeep on their home, or they can’t afford their payments, this is a crisis. Long story short, if it looks like a duck, swims like a duck, and quacks like a duck, it’s probably a duck. There’s a reason that the mainstream media doesn’t want to tell you that we’re in a recession, and it’s because they don’t want anyone to panic.
Now, I don’t want anyone to panic either, but the way we go about it is two different ways. They don’t want anyone to panic, so what they want is to keep everyone ignorant and in the system so that when the inevitable happens, they can act shocked. I don’t want anyone to panic because I want people to be prepared now, to take matters into their own hands outside of the system, and protect themselves so that when the inevitable happens, when the next crisis happens, you have an insurance policy in place.
If you are one of the 59% of Americans who’s concerned about what’s going on with our economy, that you think we’re in a recession or heading towards one, that you know that things are going to get worse before they get better because of the house of cards that everything is built upon—that is what we are here to help with. If you already have a strategy in place and you want a second opinion, we can help with that.
If you don’t know where to begin but are looking to protect yourself outside of this system, we can help with that.
Click on the link below to talk to one of our expert analysts today. They will make sure that you have a strategy in place for what’s coming next. Thank you so much for being here. I’m Taylor Kenney with ITM Trading, your trusted source for all things gold, silver, and lifelong wealth protection. Until next time.
SOURCES:
AMERICANS 59%: https://www.cnbc.com/2024/08/12/59percent-of-americans-think-the-us-is-in-a-recession-report-finds.html
RECESSION LIKE SYMPTOMS: https://www.cnbc.com/2024/08/14/heres-why-the-economy-feels-recession-like-for-many-americans.html
WHITE HOUSE RECESSION: https://www.whitehouse.gov/cea/written-materials/2022/07/21/how-do-economists-determine-whether-the-economy-is-in-a-recession/
UNEMPLOYMENT RATE FRED: https://fred.stlouisfed.org/series/UNRATE#0
CC DEBT: https://www.cbsnews.com/news/credit-card-debt-total-us-2024/
RETIREMENT: https://finance.yahoo.com/news/hardship-withdrawals-401-k-plans-150500320.html
DEFICIT SPENDING % to GDP: https://fred.stlouisfed.org/series/FYFSDFYGDP
