President Joe Biden said in an interview that aired Sunday that he recognizes why Americans don’t have much confidence in the state of the economy. “It’s understandable why people are down,” he told David Muir on ABC’s “This Week.” Watch that interview in the video below.
Biden said that while the United States is “better off than virtually any other major nation in the world, economically,” he could appreciate the malaise Americans are experiencing. Recent polls have consistently shown that, despite very low unemployment, most Americans feel they are worse off than when Biden’s term began.
He added: “Inflation is still higher than it should be and, you know, everything from gas prices to a war going on in Ukraine. I mean, so I can’t think of a time when there has been greater uncertainty.“
Under Biden’s economy, it’s not just a feeling of “uncertainty.” There is a wealth of economic data showing that the economy is trending downward. One data point is: failures. We’ve reported on bankruptcies before, but there’s even more data on bankruptcies that continue to grow, both in the US and the EU.
The end of the federal pandemic The bailout is putting many Americans and businesses under increasing financial pressure, leading to an increase in bankruptcies. Total bankruptcy filings in January soared 19% in January to 31,087, up 19% from a year ago, according to data from Epiq, a legal research firm. The number of Americans who applied Chapter 7, 11, and 13 bankruptcy skyrocketed by 20% in January 2023 since a year ago. See it in the table below and learn more here.
What is happening in the EU? 4Q 2022 saw the request from European companies EU bankruptcies have grown at the fastest pace in at least eight years. The number of bankruptcy filings increased in all four quarters of 2022. Finally, as reported by The FT, the largest increase in EU insolvencies in the fourth quarter occurred in the transport and storage and accommodation and services sectors of food (72% and 39% more). , respectively, from the previous quarter). See it in the chart below and learn more here.
James Watson, chief economist at EU employers’ federation BusinessEurope, said:
“Clearly there is a factor where governments are withdrawing support brought in during the pandemic, and that is having an impact.”
But he added:
“There is also something else as it is becoming an increasingly difficult business environment for many companies due to high inflation, weak growth and rising interest rates.”
What about the latest data in terms of the future outlook for the economy? Let’s take a look at the recent US durable goods orders report which fell the most since the covid lockdown. After a surprisingly large increase to the upside (+5.6% month-on-month) in December, analysts expected January durable goods orders fall (-4.0% month-on-month).
It’s strange that the recent data is a correction of last month’s data – government data has recently become dodgy. Real printing was worse with a 4.5% month-on-month drop, the biggest drop since April 2020. See the chart below and learn more here.
As Biden ponders his next Ukraine war actions, the economy continues to falter. No doubt, increasingly, it will be a good excuse for his administration to cover up its economic shortcomings. Let us know your thoughts in the comments section below on whether we will see a recovery in 2023 or a continuation of the downward economic trend.
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