The Real Economy? It’s MUCH Worse Than You Think

This week Janet Yellen, Chairman of the Federal Reserve Bank reiterated her outlook on the US economy and how well we are doing.  Many armchair economists such as myself have suggested that that perception is far from reality.

Over the last four quarters, I have watched profits per share from continuing operations declining while at the same time the Federal Reserve and the Obama Administration jawbone about just how great things are.  They are lying, to put it bluntly.

We’ve been told that the weakness is limited to the Energy sectors within our economy.  They are lying about that as well.  Below is a list of all the sectors where the Earnings Per Share from Continuing Operations are lower than they were the previous year. And the amount of that drop follows the Sector Name.

Businesses are in business to earn a profit.  When profits fall, they will right-size their businesses in operations and headcount to return to a profit growing enterprise. This occurs during the twelve months following the drop in earnings.  That is why employment is a trailing economic indicator, and not a leading economic indicator as the “professional” economists want to insist.

Have a look at the list for yourself.  The pain being experienced in this economy is far and wide, and spreading rapidly.  We are fast approaching the 50% mark, where more companies are earning less than they were a year ago.

How bad will it get?  How bad will it have to get before we can actually discuss that we do have a problem, and get to the real solutions that can grow the economy in a healthy manner once again?

The Federal Reserve was the last entity to acknowledge we had a problem the last time around.  Rest assured, they will do the same this time.  Trust your instincts. Those empty storefronts you see are empty for a reason.

Click here to see the list:

Newspaper   -700.00%

Steel Industry   -244.77%

Oil Gas Distribution   -225.96%

Natural Gas (Diversified)   -215.72%

Metals & Mining   -158.90%

Petroleum Producing   -156.11%

Advertising   -133.53%

Petroleum(Integrated)   -129.89%

Pipeline MLPS   -128.57%

Electronics   -117.74%

E-Commerce   -109.20%

Reinsurance   -85.78%

Oilfield Services   -85.55%

Toiletries/Cosmetics   -57.78%

Precious Metals   -52.26%

Maritime Industry   -48.15%

Paper & Forest    -45.75%

Metal Fabricating   -44.20%

Household Products   -39.72%

Investment Banking   -38.32%

Power   -32.24%

Shoe Industry   -24.44%

Heavy Truck  Equipment   -24.24%

Water Utility   -24.07%

Financial Services Diversified   -20.13%

Telecommunications Utility   -19.39%

Computers Peripherals   -17.37%

Hotel/Gaming   -16.91%

Chemical Basic   -15.44%

Biotechnology   -15.30%

Electrical Equipment   -15.03%

OfficeEquip Supplies   -13.55%

Auto   -13.14%

Public/Private Investment   -12.90%

Precision Instrument   -11.62%

Publishing   -11.30%

Insurance Life   -11.10%

Medical Services    -10.16%

Diversified   -9.68%

Packaging & Container   -6.74%

Electric Utility East   -6.32%

Chemical Specialty   -5.38%

Aerospace   -5.12%

Retail Hardlines   -4.90%

Food Processing   -4.32%

Natural Gas Utility   -3.87%

Semiconductor   -3.35%

Real Estate Investment Trust   -3.27%

Beverage Industry   -3.25%

Computer Software   -2.72%

Drug    -2.19%

Telecommunications Equipment   -1.31%

Entertainment Technology   -0.70%

This entry was posted in Economy, Federal Reserve, Finance, Jobs, Taxes by EJ Moosa. Bookmark the permalink.

About EJ Moosa

EJ Moosa believes that a smaller government is a more efficient government. He believes that better analysis leads to better solutions. A graduate of Georgia State University In Business Administration, EJ grew up in Cobb County graduating from Osborne High School and worked at several Atlanta companies including First Atlanta, IBM, and Six Flags over Georgia.

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