Reply #9: Judging by freight and fuel consumption [View All]

I'd say we are in the early stages of another contraction.

The epic fall in Chicago PMI for May is the largest since fall of 2008....

Same deal. Fuel prices, inflation, worsening margins, less spending money for consumers.... Businesses pull back a bit, and that's all it takes to start the downward cycle.

We'll see what the employment report looks like on Friday. The reason I concentrate on the household survey in times like this is that there are tons of imputations in the establishment survey, and those imputations can make the survey unreliable during times of rapid change.

Edit to add:

I am concerned about the rise in initial claims mostly because I think initial claims are currently understated due to many persons not qualifying for benefits. Also last month's treasury receipts showed a definite change in trend, so I suspect the establishment survey is the false indicator here.