You may remember the 16 leading economic indicators in the US from the past. Now, with a global economy, economic indicators on a global scale are necessary for a more complete picture on the economy.
Global Economic Compass Heading
From IMF Global Reports – April 2023, baseline forecast growth to fall from 3.4 percent in 2022 to 2.8 percent in 2023. Advanced economies to see a steeper decline in growth from 2.7 percent in 2022 to 1.3 percent in 2023. With further financial institution stress, global growth could decline further to 2.5 percent in 2023 with advanced economy growth falling below 1 percent. Inflation globally continues to impact the global economy. See the detailed report here.
A global recession continues to receive attention in various reports. The exact month and the extent remain uncertain. There is evidence already that a global recession is underway. Chief economists are stating its likelihood – inflation, higher interest rates, slowing growth are all prominent factors and now financial institutions are adding to the evidence for a recession. Source is here.
US Economic Compass Heading
The evidence is pointing toward a recession later in 2023 if not already underway.
Layoffs are mounting and expanding into various industries. According to Bureau of Labor Statistics – “the number of job openings decreased for the third straight month in March. The number of new hires was little changed at 6.1 million, while layoffs increased to the highest level in over two years – layoffs and discharges increase to 1.8 million.” Source is here. Tech companies in 2023 slashed over 170,000 jobs, March to December 2020 about 80,000 and 15,000 in 2021. Now the layoffs are expanding to other industries. Since January 1, 2023 over 1,431 companies announced layoffs. In 2022, 3,150 companies announced layoffs. Source is here. The layoffs are due to an expected recession in 2023.
One clear indicator of a recession – transportation. It is referred to as a “freight recession” – fewer trucks delivering goods around the country. Source is here.
Oil production, oil price are an indicator of a coming recession. OPEC+ reduced daily production because demand is declining and price is falling. Source is here.
The Conference Board’s Leading Economic Index dipped again for the 12th consecutive month. Source is here. What are your company’s results showing for the previous 12 months?
Overall, in US, revenues and profits are expected to be lower for the balance of the year. Yours may be impacted or already are. What are you doing?
Since 1982, the highest mark for odds of a downturn at 57 percent according to the NY Feds Recession Probabilities Model. Source is here.
Your Company’s Compass Heading
Your company’s compass heading may well be reflecting the global or overall US compass heading. This is an analysis that should be well underway. Layoffs are well underway, across multiple industries due to expected slowdown, recession and layoffs cause stress and harm for all.
Your company’s compass heading could be pointing toward a slowdown for growth, less profits or even decline. You should take immediate action to determine your company’s compass heading. Once your company is on the slippery slope of decline, slowing it and turning it around is challenging.
All the best in your journey through the current economic condition.