Economic Activity in The US Continues To Decline

As global economic conditions continue to decline, the United States is beginning to show some major concerns of its own. Recently, the new homes sales report for the month of September was released, ultimately validating concerns with regard to the strength and stability of the United States economy. Today, we’ll talk about the new home sales report, discuss other economic factors that are causing concern in the United States and talk about what we can expect to see economically from the US and around the world moving forward.

US New Home Sales Prove To Be A Cause For Concern

One of the most crucial pieces of data that economists tend to watch is new home sales. The reality is that purchasing a new home is a very big decision for anyone. Consumers generally don’t make the decision to purchase new homes when the economic outlook is negative. After all, consumers need to make sure that when they do purchase a new home, they are going to be able to meet the financial obligations associated with doing so. That’s why September’s new home sales report is so concerning. The report showed that 468,000 new single-family homes were sold in the month of September. While that sounds like a massive number, in the grand scheme of things, this is actually a very bad figure. In fact, this proved to be a decline of 11.5% from August’s new home sales figure of 529,000.

Other Negative Signs For The United States Economy

Unfortunately, new home sales aren’t the only concern that economists have with the stability of the United States economy. To name a few…

  • US Jobs – First and foremost, US jobs are showing a major sign for concern. Under positive economic conditions, we generally see strong growth in US jobs. After all, when economic conditions are going well, businesses sell more products and services. In order to fulfill on the stronger sales, corporations must hire more help. As a result, we see strong growth in United States jobs. However, that’ hasn’t been the case. The reality is that under positive economic conditions, we generally see 200,000+ jobs added to the US economy per month. In the month of August, only 136,000 jobs were added to the economy. September wasn’t much better either. In the month, only 142,000 jobs were added to the economy; creating major cause for concern.
  • Global Economic Conditions – Another factor that plays a big role in the growth of the United States economy is global economic conditions. In a world dominated by free trade, just about every singular economy is dependent on the growth of several other economies. Unfortunately, world economic conditions don’t seem great. In fact, the People’s Bank of China just strengthened its already tight stimulus. On top of that the European Central Bank is talking about furthering stimulus in the Eurozone while Japan, Brazil and several other economies continue to struggle.
  • Consumer Spending – Consumer spending is also a major concern for the United States economy. All in all, consumer spending plays a major role in the GDP of the United States. Unfortunately, consumer spending is growing at a snail’s pace; furthering concern.

What We Can Expect To See Moving Forward

Moving forward, I’m expecting to see more grim news out of the United States economy as well as the global economy. The reality is that the problems we’re facing were not created over night and are not likely to be solved over night.

What Do You Think?

What are your opinions with regard to the United States economy and the global economy? Let us know in the comments below!