February 22-28, 2025
Big news. Almost all more or less significant indices in the US came out significantly worse than forecast.
Business activity index in the industrial sector of the Dallas Reserve Bank’s area of responsibility:
Рис. 1
The forecast was +18.
S&P/CaseShiller Home Price Index (YoY) +4.5% vs. 4.3% previously.
Conference Board Consumer Confidence:
Рис. 2
Durable Goods Orders Excluding Motor Vehicles (MoM):
Рис. 3
Well, in the second section there are several indicators. The picture is quite negative and, in general, this has not happened before. Usually, as it happens during a structural crisis, some indicators are normal (that is, they fluctuate within the usual intervals, in the previous review we showed this using the example of new houses). And some (sometimes, literally one or two) deteriorate significantly. But this week’s data is bad in its entirety, which makes one think about the reasons for this phenomenon.
There are several options here. The first, the simplest, is that this is a random coincidence. The second is that this is a superposition of the consequences of several political events, of which there have been many in the last month. The third is that there is a real deterioration of the situation. And, finally, that the statistical agencies, which have been improving the situation for a long time, have begun to gradually reduce the gap between the official and real picture.
The third and fourth options differ little, since they appeal to the worsening of the situation in one way or another. The difference is that the third option does not really correspond to the structural nature of the crisis and either we have already reached the moment of a sharp collapse (some experts in the US write about this, referring primarily to the real estate market), or the hypothesis of a structural crisis is not entirely correct.
Since this hypothesis seems extremely convincing to us, it is most likely a complex combination of all the reasons mentioned. But in any case, if this situation repeats itself for several more weeks in a row, we can expect major troubles comparable to 2007-08, or even 1930-32.
Macroeconomics. Germany’s GDP -0.2% per year, 6th negative in a row:
Рис. 4
Italian industrial sales -7.2% per year, worst performance in 6 years (excluding Covid):
Рис. 5
The U.S. merchandise trade deficit is by far the worst on record:
Рис. 6
US Pending Existing Home Sales -4.6% MoM:
Рис. 7
And -5.2% per year:
Рис. 8
Thus, the indicators returned to the worst levels in the entire 25 years of statistics:
Рис. 9
Sweden’s PPI (industrial inflation index) (+3.5% per year) at a 2-year peak:
Рис. 10
As is Spain’s PPI (+2.6% p.a.):
Рис. 11
Expected wage growth in the eurozone (under agreed collective agreements) is the highest on record (+4.7% per year excluding lump sums):
Рис. 12
French unemployment claims +204.8k per month; record excluding Covid surge:
Рис. 13
Why the total number of applicants has skyrocketed to its highest level in more than 3 years:
Рис. 14
The number of unemployed in Germany has been growing monthly for 26 months in a row:
Рис. 15
And updated the maximum in more than 10 years:
Рис. 16
The number of initial jobless claims in the US also jumped, but it is within normal fluctuations:
Рис. 17
South Korea’s central bank cut its rate by 0.25% to 2.75%.
Main conclusions. In terms of strategic findings, nothing has changed since the previous week, GDP in most developed countries is falling, as is industrial production, unemployment, as is inflation, is growing. You can look at the prices of coffee and chicken eggs in the US, they have updated their record highs:
Рис. 18
Рис. 19
We will not comment on politics, just the scene in the White House with Zelensky’s participation is worth something. And even in this difficult situation, we wish our readers not to get nervous either on the weekend or during the following work week!