The United States is about to experience an economic recession, and looking at the world, the number of "weak" and "weak" consumers in the market | First time | United States
On June 30th, China Daily reported that as of now, the number of defaults by American companies ranks first in the world, according to Consumer News and Business Channel. This year, 41 companies in the United States have defaulted on their bonds, which is more than twice the number from the same period last year.
In addition, American companies have submitted over 300 bankruptcy applications this year, reaching the highest level since 2010.
Bankers and analysts believe that the risk of an economic recession in the United States is rapidly increasing, and high interest rates are the biggest culprit behind the difficulties. Companies that require more liquidity or those that already bear huge debts and need to refinance face high new debt costs.
The United States is unable to curb the spread of inflation in the long term.
However, the problem of high interest rates has always been unsolved. Federal Reserve Chairman Powell gave the possibility of further interest rate hikes in July and September, stating that fighting inflation may take several years. Federal Reserve Governor Michelle Bowman also publicly stated on Thursday that the central bank will raise interest rates again to curb high inflation.
Since the Federal Reserve initiated this interest rate hike cycle last year, the central bank has raised interest rates ten times within 15 months, totaling 500 basis points, raising the federal funds rate from near zero to the current 5.00% -5.25%.
The market is "weak" and consumption is "weak"
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Enterprises go bankrupt, and employees face unemployment. According to relevant figures, as of the week ending June 4th, the number of first-time applicants for unemployment benefits in the United States was 261000, reaching the highest level since the end of 2021. Indicating signs of weakness in the labor market.
Correspondingly, the latest data released last Friday showed that the initial value of the US manufacturing PMI in June was 46.3, a new low in six months; The initial PMI for the service industry was 54.1, a new low in five months.
The market is weak, and consumption is also weak.
According to ScoreSense, the continued high prices have exacerbated the financial pain felt by Americans, who are concerned about the possibility of an economic recession this year and are constantly cutting spending to tighten their pockets. They use personal loans to pay for monthly expenses and are also looking for money saving strategies.
61% of people said that high prices have caused financial difficulties for their families.
Gallup wrote in his report, "The public lacks confidence in economic leaders solving problems." As of last month, household food costs are still 5.8% higher than the same period last year, higher than the overall inflation rate of 4%.
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A recession storm is imminent
Renowned economist Rubini, known as Dr. Doomsday, issued a warning on Tuesday that the US economy may face a "tropical storm" that could at least lead to a brief, mild recession.
TS Lombard's Chief US Economist Steve Blitz stated in a research report on Wednesday that "the view of an economic recession is still very complete" as banks control loans and corporate profits seem to weaken again.
HSBC Asset Management also recently warned that the United States will enter a downturn in the fourth quarter, followed by an "economic contraction year.".
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