After only a minor lull, our cheerleader-in-chief is back in action.
U.S. President Barack Obama says the chances for another recession are not likely and he is going all out to help create more jobs and economic growth.
Obama spoke to CBS News senior business correspondent Anthony Mason Wednesday before and after he held a town meeting in Atkinson, Ill., to wrap up a three-day bus trip across the Midwest.
"I don't think we're in danger of another recession but we are in danger of not having a recovery that's fast enough to deal with what is a genuine unemployment crisis for a whole lot of folks out there and that's why we need to be doing more," he said during an interview scheduled for broadcast on the network's "Sunday Morning" program.
Unfortunately for the President, recent reports suggest otherwise.
The Treasurys market is flagging fears that recession could be around the corner.
The yield spread between the two-year and 10-year notes, a closely watched gauge of market sentiment known as the benchmark Treasury yield curve, has shrunk sharply this month and Wednesday the differential tightened to 191 basis points, the lowest level in more than two years, down from 259 basis points late July.
Typically when investors are optimistic about the economy, they demand higher yields on long-dated maturities to hedge against inflation and the curve steepens. That was somewhat the case in February, when the two-year and 10-year yield spread traded at a historic wide of 289 basis points as inflation fears gripped the market. Yet when worries about the economy rise and inflation fears take a back seat, investors demand a lower yield premium to hold long-dated bonds, thus flattening the curve.
"It is a clear indication of the market's deterioration in economic growth," said Adrian K. Miller, senior fixed income strategist at Miller Tabak Roberts Securities LLC in New York.
The US economy has sent its loudest signal yet that the risk of a double-dip recession is growing, data which helped drive falls in global markets.
In a fresh blitz of weak data, economists were particularly shaken after a survey of confidence among manufacturers around the eastern city of Philadelphia collapsed to its lowest level since 2009.
The main index tumbled to minus 30.7 this month – against forecasts of a reading of plus 3.7 – its weakest since the US was still mired in its last recession during the first quarter of 2009, compared with a reading of plus 3.2 in July.
Manufacturing has been a rare bright spot for the US over the last two years, but the news from Philadelphia suggests that industry is suffering as consumers retrench.
We’ve been warning here about the warning lights flashing on the credit-market dashboard. Bank of America-Merrill Lynch credit strategists recently suggested that one of those indicators is pointing to a recession.
Oleg Melentyev and Christopher Hays write:
The high-yield index [of the spread between junk-bond yields and Treasurys] has widened to 739 basis points as of close on Thursday, its widest level since Nov 2009. With the spread normally peaking at 1,000bps in full recessionary periods and bottoming at 250bp in times of strong economic growth, the current level is pricing in an 80% probability of a full-blown contraction in GDP, and a 100% chance of a mild recession.
The Bloomberg Consumer Comfort Index Was Minus 48.3 for the Period to August 14
New York -- Consumer confidence in the U.S. economic outlook slumped in August to the lowest level since the recession, raising the risk that spending will dry up.
The Bloomberg Consumer Comfort Index’s monthly expectations gauge dropped to minus 34, the weakest since March 2009, from minus 22 in July. The weekly measure of current conditions was minus 48.3 for the period ended Aug. 14 compared with minus 49.1, which was the worst reading since mid-May.
The most unstable market in the history of American stocks, wage gains that are failing to keep up with inflation and unemployment hovering around 9 percent may be causing Americans to lose faith that the economy and their financial situations will soon improve. Applications for unemployment benefits climbed last week to the highest level in a month.
Nope, no risk of another downturn here.
Time for a Bronx cheer?