Multiple Economic Data Sounds Alarm on Looming US Recession

Recently, a number of economic data or indicators have issued a signal of recession in the United States.

The latest data released by the Federal Reserve showed that the M2 money supply (not seasonally adjusted) in the United States was 20.8 trillion U.S. dollars in March, a sharp drop of 4.05% year-on-year. It was the largest year-on-year drop since the data was first introduced in 1959, nearly double the drop in the previous month, and it has also been negative year-on-year for four consecutive months.

Judging from historical data, before and after M2 growth bottoms out, the probability of a recession in the U.S. economy is very high.

In addition, the March ISM manufacturing PMI in the United States, released earlier this month, fell unexpectedly to 46.3, the lowest since May 2020. Historically, every time the indicator has fallen near this level, the U.S. economy has been in recession or on the verge of it.

A "freight recession" is also looming over the United States. A nationwide slowdown in freight has cut U.S. diesel prices in half from last year's record highs and fueled fears that the U.S. will be mired in recession.

Wholesale diesel prices in New York Harbor have fallen to $2.65 a gallon from $5.34 last May, the data show. Diesel prices have continued to weaken over the past few months.