Tess Vigeland: We exited May with news of a double-dip in housing prices. Today, we started the new month with more dispiriting economic figures. ADP — the payroll giant — said private employers added just 38,000 jobs last month. And the latest evidence from manufacturers also suggests the recovery may already have peaked. Too little and far too soon.
Wall Street brought a swift and harsh end to a four-day rally, as the phrase “double-dip” starts to sneak back into the broader economy. Marketplace’s Jeff Horwich has our report.
Jeff Horwich: You know what they say about the month of May: in like a lion, out like a double-dip recession.
Any way you slice it, the U.S. looks like an economy once again losing momentum: fewer new jobs, slower manufacturing growth, less confident consumers. Officially, it takes six months of falling national income — GDP — to declare a recession. We don’t have that. But Michael Pento, senior economist at Euro Pacific Capital, has seen enough.
Michael Pento: The economy’s headed for a double-dip. You look at housing, you look at GDP, you look at initial claims. We are definitely in a recession. A recession, by the way, that never really ended.
Pento actually kind of welcomes the double-dip. He sees it like a painful do-over, a chance to fix the problems that brought the economy down in the first place.
Pento: The only viable solution is to allow home prices to fall to a level that’s supported by a free market. We have to get the consumers’ balance sheet in order. We have to get the government’s balance sheet in order.
Some of today’s ammo for the double-dip doomsayers came from the Institute for Supply Management, which posted a slowdown (PDF) in U.S. manufacturing growth. But ISM survey chair Brad Holcomb says the pessimists should hold their fire.
Brad Holcomb: Companies are taking their foot off the accelerator a bit here. It’s certainly something to watch over the next couple of months, but, you know, a one-month change of this nature does not constitute a trend.
Looking over the whole first part of the year, the trends Holcomb does see include the best run of manufacturing job growth in 38 years. Similarly, viewing the broader economy with wider lens paints a brighter picture. But one rough month of May seems to have put the double-dip back on the menu.
I’m Jeff Horwich for Marketplace.
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