Here are six indicators that the world is in a recession, meaning we have already succumbed to the dreaded double-dip recession.
Three of the indicators come from specific industries, all U.S.-based. One of the indicators is statistically oriented. Another indicator is from outside the U.S., and the final one is from a respected economist.
Weekly U.S. railway traffic, a key barometer of buying and selling, is now fractionally negative on a year-over-year basis, as it was ahead of the 2008 downturn.
The business of making things is not recovering. The Dallas Federal Reserve's manufacturing index in September fell further into negative teritory to -14.4 from -11.4 in August and -2 in July. Keep in mind that in November 2007, a month before the Great Recession, the index was at -10.7.
Things are getting worse, not better. Washington says that in August there were 295,000 new home sales, a 2.3 percent decline and the fourth month in a row that this index has fallen. The August figure markss a six-month low and -- more importantly -- is now 25 percent lower than it was in June 2009, the lowest point of the Great Recession. Prices are off 8.5 percent from a year ago.
Is there any doubt that this is a depression statistic? asked David A. Rosenberg, chief economist and strategist of Gluff Sheff + Associates Inc., a top money manager.
But wait; there's more. The latest S&P/Case-Shiller U.S. National Home Price Survey found that 18 of the 20 cities and both of the survey's Composites are showing that home prices are still below where they were a year ago. The 10-City Composite is down 3.7 percent and the 20-City is down 4.1 percent compared to July 2010.
In short, the U.S. housing market is still southbound.
Overal U.S. economic activity
The Chicago Federal Reserve's national activity index for August was -0.43 percent, slightly below consensus. The spot index has been flat or negative now for five months in a row.
Stagnation may be an overly positive term. The Economic Cycle Research Institute in mid-September entitled its U.S. cyclical outlook Economy on Recession Track.
Here's an excerpt from the report: Today, we must sound the alarm bells loud and clear. ECRI's leading indices of U.S. economic activity have turned down in a textbook sequence. The recessinoary decline in a summary measure of numerous reliable leading indicators, coupled with an ominous drop in a broad measure of current ecnoomic activity representing facts, not forecasts, constitutes a compelling recession signal.
The institute's Lakshman Achuthan says much the same applies to the entire world.
The issues that ail the U.S. economy and the jobs market today are not things that result from nearby events. What we're living through and dealing with now has been building for decades, he says. If you look at the data, you see that the pace of expansion has been stair-stepping down ever since the 1970s, on all counts - on production, how much can we produce, how many jobs can we create, how much money do we make, how much do we sell. These are all trending down.
UBS says things are going from bad to worse.
We believe the Eurozone sovereign crisis has entered a more dangerous phase, said UBS economist Larry Hatheway. Financial and banking stresses are plainly evident as concerns about sovereign default grow. Notwithstanding signs from Washington this past weekend that European and world leaders are willing to consider more decisive policies, concrete steps remain elusive. Yet rising uncertainty threatens an already weakened world economy.
In discussing the effect of a global double-dip recession, Hatheway estimated share prices could plunge from current levels by 20 percent to 30 percent.
The top economist for the Dallas Federal Reserve said the U.S. economy is on a 'knife edge' between growth and contraction and monetary policy tweaks do not seem to be helping.
We are in the midst of the Second Great Contraction, Harvey Rosenblum said. Economic growth has slowed; it may have stalled. The patient isn't responding well to the medicine.
Taking a more blunt approach earlier this month was Nouriel Roubini, the New York University professor who correctly called the Great Recession. In an op-ed piece for Reuters.com Roubini warned not of recession but of depression.
The risks ahead are not just of a mild double-dip recession, but of a severe contraction that could turn into Great Depression II, especially if the eurozone crisis becomes disorderly and leads to a global financial meltdown, Roubini wrote.