Leading indicators down again in June:
The Conference Board's Index of Leading Economic Indicators fell another -0.1% in June; it has risen slightly only twice over the past year. This privatized index is no longer the useful forecasting tool it once was but it clearly reflects today's worsening recession conditions.

Normal weekly salary down year to '08-Q2:
The BLS reports median normal real weekly salaries fell slightly yr/yr to '08-Q2 due to continued shift from higher to lower-paying occupations and industries and to lower-paid women. The number of men working full time DECLINED yr/yr as all the meager job gains were for women.

Single-family housing down, condos up:
New housing starts sharply separated in June with single-family starts and permits still falling sharply while multi-unit condo and apartment starts/permits soared by over 40%. This may be the start of a response to high gas and utility costs forcing more efficient downsizing and/or it may be another sign of increased economic polarization of households.

Industy output in partial June rebound:
Industrial output regained 0.5% in June of the -0.9 decline in April/May on utilities and mining gains. Manufacturing output also gained 0.2% in June from -1.0 loss in April/May but remains down -0.6% yr/yr. Even with Mines and Utilities roaring, overall capacity utilization is down to just 79.9%; 77.6% for Manufacturing. This is the weakest 79 months of expansion since 1927-'34 and the current recession is just beginning.

Weekly wages plunged again in June:
Average weekly wages bought -0.9% less in June, -2.4% less yr/yr, and back to the average wage in 1999. With no current savings, record high debt and debt-service, falling home and vehicle values, a job market in decline and new borrowing more difficult, household spending will remain very sluggish throughout 2008 in what is likely to be a long, severe downturn.

Consumer prices soar 1.1% in June:
With soaring gas prices in June, all energy costs rose 6.6%, transportation cost rose 3.8%, and housing and food costs continue to rise. Financially stresses households face continued sharp increases in the price of essentials while most other businesses, with little pricing power, cut profits, wages and jobs.

June retail sales up far less than prices:
Total retail sales edged up just 0.1% in June, far less than the 1.1% price increase. Downward revision now show only a 0.2% real gain in April and a slight decline in May despite rebate checks. Almost all spending increases are for essentials of gas, groceries and health care as household finances continue to worsen despite lack of savings and falling wages and networth.

June producer prices soar 1.8% on Energy:
Sharply rising energy prices drove producer prices up 1.8% in June after a 1.4% rise in May; up 9.1% yr/yr. Most producers lack pricing power to pass on higher energy costs, squeezing profits, wages and investments in the difficult months ahead.

Recession only slows trade deficit in May:
Despite the debt crisis and near economic stagnation, the trade deficit eased only slightly to -$59.8 billion in May still requiring $2 billion of net new foreign borrowing each day in the midst of the worst financial crisis since 1933. 54 of the 82 goods-making industries are in deficit and losses are worsening for the troubled auto/parts sector and for advanced tech products.

Job and real wage losses continued in June:
The US lost another -91k private sector jobs in June, the 7th straight month of decline. Total paid hours also fell by -0.1%. The private sector has now lost -242k jobs yr/yr so even with 257k new government jobs, the total job count is up just 15k yr/yr. Excluding private health and education bureaucracies, bars/restaurants, the private sector has lost almost 1 million jobs yr/yr. Weekly wages almost certainly failed to keep up with gas and other price increases in June. The economy is sinking from unsustainable debt with no new engine or policy strategy in sight.

Federal "rebate" drives income up in May:
The Federal debt-financed rebate in May slashed taxes by -25.1% and raised Government checks by 10%, driving up real disposable incomes by 5.3%. Real spending rose 0.4% leaving "average" savings temporarily at 5% of disposable income. Financially-pressed households welcomed this one-shot rebate but there is no sign of alterning the downward cycle that seems to be worsening.

Q1 GDP driven by health care/home costs:
BEA estimates real GDP rose at a 1.0% annual rate in Q1 with all growth in medical care and home costs, including heating. Otherwise the economy was stagnant. Business investment fell slightly and home construction fell sharply for the 9th straight quarter. Foreign-made imports fell sharply and US-made exports rose slightly. Federal Defense spending rose as State/Local govts cut back on investments. Despite huge Wall Street bonuses, the overall savings rate was only 0.4% of disposable incomes, the lowest Q1 rate on record.

New home sales down, inventories soar:
New single-family home sales fell -2.5% in May to levels now down -40.3% yr/yr. Prices continued to fall while unsold inventores rose to 10.9 months with the median time to sell a house -- even after discounts -- now 8.5 months. There is still no end in sight to debt and income troubles.

Prices spike but durable orders unchanged:
The nominal value of orders for durable manufactured goods was unchanged in May after falling -1.0% in April; down -1.5% yr/yr. Nominal values of orders for autos and parts are back to levels of 1998 even as producer costs and prices are rising.

Consumer expectations the worst on record:
The Conference Board's Expectations Index fell in June to the lowest levels ever in a series started in 1967 while the overall Index plunged to its lowest levels since 1992. Concerns are surging for declining jobs, incomes and business conditions.

2008-q1 Trade deficit and borrowing worsen:
US net payments on all global Current Accounts reached -$176.4 billion in Q1, -5% of GDP, forcing the US to borrow or sell assets to foreign interests worth -$2 billion per day. Since 2001 the US Current Account deficit is now -$4.4 Trillion and seems likely to reach -$5 Trillion by the end of 2008. Manufacturing deficits and debt service obligations with China are soaring, complicating efforts both to finance and to reduce production shortfall.

Q1 Productivity up, hours worked plunge:
Total hours worked in Non-farm businesses plunged at a -1.8% rate in Q1 and were even down -0.6% yr/yr. Even with lavish Wall St. bonuses, avg. real salaries and benefits rose at only a 0.6% rate per hour in Q1, far less than the 2.6% growth in output per hour. This means even avg. real compensation was a dis-inflationary force in Q1. Real compensation per hour is down -0.1% yr/yr with hours paid down -0.6%. Manufacturing was worse with a decline in output and a worse plunge in employment created a misleadingly healthy rise in productivity. Today's troubles begin after the weakest 6-yr expansion since 1927-1933.

Selling-off strategic US assets worldwide:
The Commerce Dept. reports annual foreign direct investment (FDI) to form new business in the US fell to just 7.9% of the total while FDI to acquire the worldwide assets of existing US firms rose to 92.1%. Since 1992, 90% of $2 Trillion in FDI has gone to acquire existing US assets worldwide. This represents the recycling of a portion of the US' current account deficit payments.

Household debt record, home equity sinks:
Household debt soared to a new record 139% of after-tax income in '07Q4 and homeowner equity plunged to record low 47.9% of falling home values. Seven years ago debt was 101.2% of disposable incomes and homeowners held 57.6% of the rising value of their homes. Debt is rising faster than net worth so the debt-to-net worth ratio also reached a new record 24.9% in Q4. These unprecedented debt levels pose unique risks.

Sales of existing homes are still plunging;
Existing home sales fell another -0.4% in Jan, down -23.4% yr/yr to the lowest levels in 10 years. Median and Mean home prices also continued to fall, down -4.6% and -3.7% yr/yr, respectively even ignoring large incentives now needed to close a sale. For the first time in the Assoc's records, Median and Mean prices fell for the full year 2007 and are now below price levels in 2005. A recession likely already has started and odds are 60/40 that it will be long and deep.

Construction decline widened in December:
Census reports the nominal value of all construction spending fell -1.1% in Dec, the third consecutive monthly decline. The decline in residential construction is accelerating and public construction also fell in Dec. offsetting the slowing growth of private nonresidential. With state and local governments now facing budget shortfalls, the public works boom that has offset the housing decline appears to have ended.

Debt-service pmts. stay near record:
Even with their large fees, the largely unregulated financial "innovation" of subprime and payday lenders have not set introductory rates low enough to reduce debt service far below record levels of Q2 disposable incomes. With record debt levels rising and recent exotic "adjustable" rates beginning to convert, this burden will worsen quickly, further slowing other spending.

The 2001 Recession
The recession that started in March, 2001 following 10 years of only average economic growth, officially ended in November, 2001. By most measures of output, investment and job creation, the current cyclical "recovery" is the weakest on record.