Four US States Officially In Recession; Data Points To Broader Problems

With four states officially in recession, and economic data continuing to point toward a broader downturn, it’s getting increasingly difficult for officials to sell the illusion of a strong US economy.

Peter Schiff has been saying for weeks that the US may already be in a recession. Recently, Jim Grant appeared on CNBC’s Closing Bell and echoed Peter’s sentiments, saying the US likely went into recession in late December. And while officials at the Federal Reserve keep insisting the US economy remains strong, some mainstream analysts have started sounding recession warning bells as well. In fact, the number of mainstream economists predicting a recession within the next 12 months continues to rise.

So far, people have been able to blow off talk of a looming recession as mere chatter, but in some US states, it’s not just speculation; it’s reality. According to a Bloomberg report, four US states have officially gone into recession, with three more “at risk of prolonged declines.”

The economies in Alaska, North Dakota, West Virginia and Wyoming are all retracting, according to Bloomberg:

Seven of the 50 US states have had downturns in economic activity over the final three months of last year, according to tracking by the Philadelphia Fed. Louisiana, New Mexico and Oklahoma are all at risk of recession, according to Moody’s. Wyoming and North Dakota’s economies have declined for at least the past 10 months, according to the Philadelphia Fed.”

Analysts blame slumping energy prices for the downturn, but Bloomberg notes that manufacturing dependent states are also at risk:

The regions suffering the most are in the flop stage of the energy industry’s boom-to-bust cycle, and manufacturing-dependent areas hurt by a rising dollar are at risk of receding. Whether the weak links break the entire US economy will hinge largely on a group that’s benefited from the energy price collapse: American consumers.”