Americans received more bad news about the economy this week after the Commerce and Labor Departments issued reports for the final quarter of 2018 and January 2019 showing that retail sales dropped to a low not seen since 2009 and unemployment claims rose.
President Donald Trump has constantly bragged that the economy is strong despite several indicators that we are heading for a recession.
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His tax cuts for the wealthy have caused the debt to hit $22 trillion and the deficit to hit $1 trillion or more. His multiple trade wars and the 35-day government shutdown have also not helped as the stock market had its worst December since the Great Depression and gross domestic product (GDP) took a hit.
You know what else took a hit? Retail sales.
According to Reuters:
“The Commerce Department said retail sales tumbled 1.2 percent, the largest decline since September 2009 when the economy was emerging from recession. Data for November was revised slightly down to show retail sales edging up 0.1 percent instead of gaining 0.2 percent as previously reported.
“Economists polled by Reuters had forecast retail sales increasing 0.2 percent in December. Retail sales in December rose 2.3 percent from a year ago.”
The news service also reports that the dollar slid in value and consumer spending is concerning.
“The outlook for consumer spending, which has been underpinned by a strong labor market and cheaper gasoline, is not encouraging. A report this week from the New York Fed showed the overall debt shouldered by Americans edged up to a record $13.5 trillion in the fourth quarter of 2018.”
And all of that is on top of increasing unemployment claims.
“In a separate report on Thursday, the Labor Department said initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 239,000 for the week ended Feb. 9.
“Economists had forecast claims falling to 225,000 in the latest week. Claims surged to a near 1-1/2-year high of 253,000 in the week ended Jan. 26 and last week’s surprise increase suggested some ebbing in labor market conditions.”
The economy already shed billions of dollars because of Trump’s disastrous shutdown over his wall demands, and now the country has to brace for the impact of new tariffs against China Trump has threatened to enact if he doesn’t reach a deal by a March deadline.
Fears of a recession have only grown since Trump took office as he makes irrational decisions and signs bad economic policies, moves that are backfiring because he has also repeatedly insisted to his base that the economy is just fine even though it clearly is not. As it turns out, many of Trump’s supporters have been discovering in recent months that his tax cuts screwed them over and that his trade wars are hurting their businesses.
2019 is already demonstrating that the Trump slump is very real and we can expect more bad news in the future as long as he remains in office.
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