Although many declared the deceleration in the economy in December to be a “soft patch” that we’ve somehow recovered from, others aren’t so sure.  The rest of the global economy is slowing down and sinking at a fairly rapid rate, and the U.S. economy will likely go with it.

According to a report by Forbes, there is no “economic immunity” for the United States once the global economy is in tatters. The report points to many problems in the global marketplace that could signal a major downturn for the economy pushing the U.S. ever closer to an unavoidable recession. When the U.S. consumer goes on strike (quits buying things for any reason), the odds of a recession skyrocket. So, it would behoove market watchers to stop ignoring the growing potential for a significant economic slowdown.

Japan’s latest employment data was very poor while China’s high and rising bond defaults are still showing a contraction although the February number (49.9 PMI – still slightly in contraction) moved up from the 48.3 January disaster. Other problems are arising in the Eurozone as well.  The manufacturing PMI (Purchasing Managers Index) of 49.3 is the lowest since 2013.  The latest U.S. trade deficit number was a record -$79.5 billion.  Exports fell -2.8%. This confirms the weakness in foreign economies. Perhaps the only good news is that Germany did show decent January retail sales growth. That means consumers spent more of their disposable income.

The U.S. did not fare well when it came to auto sales either.  New car sales in February were at an 18-month low. Part of the problem is that new and used car prices are now at record highs, and bank credit has tightened making getting into a brand new vehicle simply too expensive for many. A report earlier in February also indicated that auto loan delinquencies are now at highs seen right before the Great Recession.

Just on the heels of the United States government’s debt surpassing $2 trillion comes the news that there are now a record number of Americans who are behind on their record high car payments. According to CNBC, more than 7 million Americans are at least 90 days behind on their auto loans, according to the New York Fed. This is a major concern, considering the average car payment in the U.S. is now $523. –SHTFPlan

Forbes states that it may be too soon to come to the conclusion that the U.S. has made it through the “soft patch,” or December of 2018’s market downturn.