US Economy Teetering on Brink of Recession, Flashing Warning Signs: Société Générale

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Introduction

Buckle up, buttercup, because the US economy is throwing some serious shade our way, and it might be signaling a recession. That’s the word on the street from Société Générale, a big-shot European bank that’s been waving red flags about a US recession for a hot minute now.

While plenty of investors and economists are still rockin’ those rose-colored glasses, dreaming of a soft landing, Société Générale ain’t buying it. Albert Edwards, the bank’s main man for global strategy, is pointing his finger at some recent data that’s got him saying, “Houston, we have a problem.”

Albert Edwards’ Warning

Even with the R-word looming large, investors are acting like they’ve got blinders on, clinging to the hope of a soft landing. But Edwards is here to give ’em a reality check. He’s calling out three major economic indicators that are basically screaming, “Recession ahead!”

Three Warning Signs of an Impending Recession

Dwindling Economic Growth Expectations

Remember those Atlanta Fed economists who were all gung-ho about economic growth? Well, they’ve done a complete one-eighty. They’ve slashed their GDP growth projections for the second quarter in half, from a respectable to a measly . Talk about a buzzkill, right?

This dramatic downgrade is like a slap in the face, reflecting how much weaker-than-expected economic data has been lately. As GDP growth goes MIA, equity investors better brace themselves for a potential recession.

Slowdown in Manufacturing Activity

Manufacturing, the backbone of any strong economy, is looking kinda wobbly these days. New manufacturing orders took a nosedive in May, and overall manufacturing activity has been shrinking for what feels like forever – eighteen out of the last eighteen months, to be exact. Ouch, that’s gotta hurt! This data comes straight from the Institute for Supply Management, so you know it’s legit.

This trend is giving economists major anxiety because GDP growth and manufacturing activity are tighter than two peas in a pod. The more manufacturing slows down, the more those recession fears start to feel like a self-fulfilling prophecy.