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These Two Charts Squelch Any Recession Chatter

If you’re tired of living in a chronic state of “information overload,” I feel you!

The investment news and commentary never ceases. But that’s why we jump into the mix on Fridays to do our part. Specifically, we select a handful of graphics to put each week’s investment news into perspective for you.

Say goodbye to long-winded commentary and hello to easy-to-understand pictures, accompanied by some very brief observations.

This week, we’re tackling the nasty rumor that the U.S. economy is headed for (gasp) another recession.

Why? Because earlier in the week, the world’s largest bond fund manager, Bill Gross, said the U.S. economy risks lapsing into a recession.

Oh really? Then how do you explain the fact that railroad shipments are at the highest levels in almost three years? Or that the Federal Reserve’s industrial production index is clearly rebounding?

If the economy were indeed destined for a recession, production materials wouldn’t be moving across America on the rails. And industrial production would be decreasing, not increasing. Just saying, Mr. Gross.

While we’re at it, we might as well prove that the early signs of an economic uptick in the United States aren’t an isolated event, either. Just look at the latest price action in the Baltic Dry Index.

For those that don’t know, the index tracks the cost of shipping major raw materials. Like iron ore, coal, grain, cement, copper, sand and gravel, fertilizer, even plastic granules. Or, more simply, the precursors of economic output. As such, the index provides a measurement of the volume of global trade at the earliest possible stage.

And since August, it’s up about 50%, indicating that the building blocks of global growth are on the move again, too.

Bottom line: Based on the movement of raw materials in the United States and globally, it’s a bit premature to suggest that the United States is destined for another recession.

That’s it for this week. Before you sign off, let us know what you think about this weekly column – or any of our recent work at Wall Street Daily – by sending an email to: feedback@wallstreetdaily.com or by leaving a comment below.

Thanks and enjoy the weekend!

Ahead of the tape,

Louis Basenese