For a long time, a lot of people wanted to deny what was happening to us. But now we have reached a point when you can no longer do that and retain your credibility. Job openings have been plummeting, and layoffs have been spiking. Manufacturing activity is way down, and delinquency rates are way up. In fact, the credit card delinquency rate just hit the highest level that we have seen since 2011. Just about everything has gotten significantly more expensive, and America’s food banks are being overwhelmed by vast numbers of hungry people. Nobody can deny any of these things, and now U.S. Treasury Secretary Scott Bessent is publicly admitting that “there are sectors of the economy that are in recession”…
Treasury Secretary Scott Bessent and Stephen Miran, President Trump’s appointee to the Fed’s Board of Governors who is on a temporary leave from his job leading the White House’s Council of Economic Advisers, this week struck a downbeat tone about the health of the world’s largest economy. Mr. Bessent went so far as to say some sectors were already contracting. He did not specify which sectors, but high mortgage rates have put housing and adjacent industries such as construction under pressure.
“I think that there are sectors of the economy that are in recession,” Mr. Bessent said on CNN on Sunday. He described the economy as being in a “period of transition” because of a pullback in government spending to reduce the deficit. He called on the Fed to support the economy by cutting interest rates.
Bessent’s job is to put a positive spin on America’s economic performance.
But now we have reached a stage where even he cannot deny the truth.
Just look at what is happening to the shipping industry.
When the economy is booming, the amount of stuff that is being physically moved around goes up.
But when the economy falls on hard times, the amount of stuff that is being physically moved around goes down…
As someone who’s spent decades immersed in the freight and logistics industry, I’ve learned that freight data often tells the story of the broader economy long before traditional indicators catch up. Right now, that data is painting a stark picture: The U.S. economy is entrenched in a goods recession. While consumer spending on services might be holding steady, the movement of physical goods—the lifeblood of manufacturing, retail, and industrial sectors—has ground to a halt. This isn’t speculation; it’s evident in the high-frequency data we track at FreightWaves through our SONAR platform.
Nobody can pretend that this isn’t happening.
I realize that some of you may not want to hear this, but long-haul trucking volumes are down 30 percent on a year over year basis…
The long-haul trucking segment (800+ miles), however, has fallen off a cliff. Year-over-year volumes are down a shocking 30%, a sign that the broader economy is in trouble. Long-haul trucking is more exposed to the energy, manufacturing, auto, and housing segments.
That isn’t a small shift.
That is a monumental collapse.
When Freight Waves stated that long-haul trucking “has fallen off a cliff”, they were not exaggerating.
Manufacturing activity is down too.
In fact, it just declined for the eighth month in a row…
US manufacturing turned down in October on the PMI index, dropping from 49.1 in September to 48.7 in October, marking the eighth consecutive month of contraction. Price pressure may have eased (58 from 61.9), but production (48.2 from 51), inventory (45.8 from 47.7), and deliveries (54.2 from 52.6) have all declined.
Employment in the sector continued to decline (46 from 45.3), and 67% of panelist noted that companies are working on managing their current workforce rather than hiring. Again, lower rates are unlikely to address this structural problem or encourage companies to expand during a contracting business environment. Eight consecutive months of decline should be a warning as manufacturing declines often precede recessions, or in this case, ongoing stagflation.
Since less stuff is being produced, it should be no surprise that cardboard box shipments have fallen to “their lowest levels since the third quarter of 2015”…
Nearly every physical good in the modern economy is transported or stored in a corrugated cardboard box. That’s why box shipments act as a reliable real-time economic barometer, especially very useful now, as the government shutdown enters day 33 and key agencies like the BLS have halted official economic data releases, leaving private high-frequency data sets to fill the void.
The latest box shipment data from Bloomberg, citing a report by the Fibre Box Association, shows some of the weakest volumes in years, reflecting waning consumer sentiment and potentially signaling a subdued holiday shopping season. These shipments were at their lowest levels since the third quarter of 2015.
This is the real economy.
Factories make things and those things are put in cardboard boxes and shipped around the country in trucks.
At every point along our supply chains, activity is slowing down.
So let’s stop pretending.
All over the United States, major employers have been slashing their workforces…
When Starbucks Corp. fired 900 corporate employees in September, economists hardly batted an eye. After all, the coffee chain had already done a February culling as part of new management’s drive to get the Frappuccino maker back on track. In October, Target Corp. eliminated 1,800 roles to help the beleaguered retailer move faster. For each corporate cutback, there’s been a clear explanation: Amazon.com (14,000 corporate jobs) blamed artificial intelligence; Paramount (1,000 workers) just completed a merger; Molson Coors (400 jobs) can’t get carb-conscious consumers to drink enough beer.
Separately, each announcement can be read as a one-off. Yet taken together, some economists worry that the recent spate of cuts is starting to look a little less like individual belt-tightening and more like a warning sign.
Layoffs were up in 2024, and now they are up again in 2025.
Because most Americans are just barely scraping by from month to month, many of those that are losing their jobs are at risk of losing everything.
In this very difficult economic environment, it should be no surprise that vehicle repossessions are expected to hit a level that we haven’t seen since the Great Recession…
Car repossessions are booming as Americans increasingly struggle to pay.
The number of seized cars hit a 14-year high of 2.7 million in 2024, according to data from the Recovery Database Network (RDN), which processes around 90pc of all requests from lenders for repossessions.
Kevin Armstrong, editor of CU Repossession, an industry publication, expects the total will hit three million this year based on current trends, only just shy of the 3.2 million peak seen in 2009.
Things are bad, and 57 percent of Americans expect economic conditions to get even worse next year.
Unfortunately, I think that most Americans are still way too optimistic about what is ahead.
There is no “quick fix” that is going to turn things around, because our system is fundamentally broken.
We consume far more than we produce, a very large percentage of the population has become dependent on the government, and no nation in the entire history of the planet has accumulated as much debt as we have.
We are in far more trouble than most people realize, and the road ahead is not going to be pleasant.
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