The U.S. economy is on the brink of recession. This is indicated by the July development of economic activity, which has decreased for the first time since the outbreak of the coronavirus pandemic. The services sector was mainly to blame.
Downturn in the private sector economy
The value of the US Purchasing Managers’ Index (PMI) fell to 47.5 from 52.3 points in June, according to Friday’s S&P Global survey. If the PMI level falls below 50 points, it means a decline in economic activity in the private sector. In the US, this is the first time in two years that the US economy has suffered the effects of the coronavirus pandemic and the introduction of anti-epidemic restrictions.
U.S. Economy on the Brink of Recession
The decline in economic activity is due to the services sector, where the decline was so massive that it outweighed a relatively solid result from industry, which is still above 52 points in the PMI index. Once again, there have been suggestions that the US economy is on the brink of recession, or even already in recession. Moreover, in light of the fact that the decline in economic activity is the largest since the global financial crisis of 2009, if we disregard the coronavirus crisis. Whether the US is really in recession will only be confirmed by GDP data for the second quarter of this year.