Consumer sentiment, regional factories sound recession bell
The alarm bells of U.S. recession rang louder on Friday as reports showed business activity in the U.S. Midwest plummeted in February and consumer sentiment slumped to a 16-year low.
More grim news poured in from the inflation front, with government data indicating consumers were struggling in January to keep ahead of robust price growth, which remained uncomfortably high by standards normally associated with the Federal Reserve.
The National Association of Purchasing Managers-Chicago said its index of regional business conditions tumbled to 44.5, its lowest since December 2001, from 51.5 in January. The result was well below the level of 50 that separates growth from contraction.
“It looks like there’s been a reversal of fortune for the manufacturing sector from last month and the economy appears to have fallen off a cliff,” said Chris Rupkey, senior financial economist, Bank of Tokyo/Mitsubishi, New York, referring to the Chicago PMI report.
“This is just the latest piece of evidence that the U.S faxless payday loans. economy is teetering on the edge of recession.”
Economic concerns pushed stocks .DJI down sharply while the dollar was stuck near three-year lows against the yen.
Government bond prices, which usually benefit from signs of economic weakness, rallied.
The Reuters/University of Michigan Surveys of Consumers said its main index of consumer sentiment fell to 70.8 in February from 78.4 in January and was the lowest since February 1992.