In the economy, determining whether a market is in a recession is difficult, as well as predicting its signs for reference only. Nevertheless, signs that the US economy is currently more and more unstable, raising suspicions about a new crisis 10 years after the 2008 recession.

In November 2018, the famous American carmaker GM cut thousands of jobs in the United States. In early August 2019, US Steel laid out 200 workers in Michigan. Van sales fell 23% in the 12 months to July 2019, threatening thousands of Indiana industry workers.

Not only manufacturing, labor in many other industries such as retail, oil and gas, services ... are also facing the risk of losing jobs in the US.

In recent months, about 5 million workers in the United States have lost their jobs, of which 2 million were laid off. Ironically, production and total employment across the United States has increased, creating mixed signs for experts.

According to the analysis, some areas in the US have actually fallen into recession, and the opposite signs of the market only show the disconnection between the economic regions of the US.

An underground recession has started?

Before going into numbers, we need to understand what recession is. This is a phenomenon of the decline in business and production activities of the economy. Demand and orders dropped sharply across all industries. However, in the US, some sectors and economic zones have declined dramatically while in some places, there has been a sharp increase, but most experts believe that US growth is not really sustainable.

A crisis can occur in many ways, from fluctuating oil prices to the collapse of financial markets or real estate bubbles. Regardless of the cause, the US Federal Reserve (FED) has always gone through several rounds of monetary policy tightening, rising interest rates to curb inflation too high. The Fed raised interest rates twice in 2018, and despite being extremely cautious about interest rate adjustments this year, we still recognize the confusion of the US central bank in assessing the economy. Growth or face recession risks.

In addition, almost every recession in US history affected the real estate market, where the credit ratio was the highest in the industry. This is also the place showing the most accurate signal about the economy before each crisis.

Before the 1930 Great Depression in the United States, real estate investment in the wire had declined two years ago. History repeats itself once the employment rate in the real estate industry peaked in 2006 and then declined, two years before the 2008 recession.

Currently, real estate investment in the US has started to decline since 2018, and the proportion of labor in the industry has also begun to fall from March 2019.

Of course, the situation may change after the Fed cuts interest rates in July 2019 and may decline again in September 2019. At that time, low-interest rates will stimulate investment in real estate.

However, real estate is not the only economic segment sensitive to the recession. The US manufacturing industry can also foresee what the economy is facing. The strong dollar against many countries makes exporting difficult, and businesses are having headaches with outstanding debts.

Back in 2006, the rate of labor in the manufacturing of durable goods (Durable Goods) peaked and declined, two years before the 2008 crisis. This year, the situation is not much better when the purchasing management index (PMI) of the US manufacturing industry declined from August 2019.

Since December 2018, US manufacturing output has decreased by 1.5% while working time in the industry has also reduced. Part of the reason for this is the US-China trade war, but the main reason is due to declining domestic demand. Domestic car sales in the US have decreased in recent months, showing that consumers are increasingly afraid of the prospect of recession and limit spending large sums of money.

In other economic sectors, the signs of decline or growth are difficult to predict as good or bad signals for the economy due to the rapid change of technology. The former oil industry, for example, hires more workers because it is synonymous with rising oil prices. But today with shale-oil extraction technology, hiring more workers is normal, even if the declining oil industry is a bad sign for the economy.

Another example is the decline in labor in the retail industry that used to be considered a terrible signal, but with the development of e-commerce, the US retail industry has been in decline for 2.5 years. What happened? Of course, the continued decline in the retail sector may not be a good sign, but it is difficult to assess the economy through this segment when e-commerce is crowned.

Despite the contrasts in economic sectors, many experts believe that the US is entering a sensitive period when the overall growth is good, but some regions and states have been in recession. The decline in the retail, manufacturing, and construction industries has caused many countries to rely on these industries.

In Indiana, for example, more than 100,000 manufacturing workers have lost their jobs, equivalent to 4% of the state's total employment. This is the latest state among the economic regions with an increasing unemployment rate. The remaining states include Ohio, Pennsylvania, and Michigan.

These are critical areas of the manufacturing industry in the US, and their decline could be the first sign on the path of recession into the world's largest economy.

Author's Bio: 

Tony - Dedicated Writer