US business activity stalling, consumers' inflation expectations surge

[groundloop]

Source: Reuters

U.S. business activity nearly stalled in February amid mounting fears over tariffs on imports and deep cuts in federal government spending, erasing all the gains notched in the aftermath of President Donald Trump's election victory.

The tumble in activity to a 17-month low reported by S&P Global on Friday was the latest in a string of surveys to suggest that businesses and consumers were becoming increasingly rattled by the Trump administration's policies.

Business and consumer sentiment soared following the Republican's November 5 victory on hopes for a less-stringent regulatory environment, tax cuts and low inflation.

"The Trump business honeymoon is over, it seems," said Kyle Chapman, FX markets analyst at Ballinger Group.

Read more: https://www.reuters.com/markets/us/tariffs-federal-government-spending-cuts-restrain-us-business-activity-2025-02-21/

[travelingthrulife]

1. "gains notched in the aftermath of Trump's victory"

Do they mean during the Biden administration? He's been in office one month, all downhill as far as I can tell. Keep spinning it Reuters.

[groundloop]

2. There was a small bump after tRump was elected based on expectations of lower tax on big business....

[Bernardo de La Paz]

4. The market bumped up AFTER tRump's win Nov. 5. But has gone mostly sideways

The market made gains and then lost them. The S&P 500 gained about 2.5% on Nov. 6. The point to make is that Biden left tRump an excellent economy and all signs point that tRump has ruined it in one month (though you don't take quite as far as I did just there).

The stock market gains during Biden's administration have NOT been erased, so Reuters is NOT "spinning it". Only the tRump gains have been erased.

[progree]

8. Between election day close and pre-inauguration day, S&P 500 went up 3.7%. From then to now: up 0.3%

Last edited Mon Feb 24, 2025, 10:37 PM - Edit history (1)

# 11/5/24 close (election day): 5783
# 1/17/25 close (Last close b4 Inauguration Day): 5997
# Friday 2/21/25 close: 6013 (up 0.3% since b4 inauguration day and up 4.0% since the election)

https://finance.yahoo.com/quote/%5EGSPC/history/

So he's still "above water" on both measures. But one single very mild down day, of just 0.3% or more, will put him under water for his presidency. So we have that to look forward to.

It actually hit an all-time closing high two days ago, Wednesday, Feb 19: 6144
but dropped 2.1% since then.

I don't know what the Dow did, and I don't care, since I consider it a silly legacy measure of just 30 cherry-picked stocks, price-weighted (how silly!) It should have faded away along with the Big Band era, but habits are very hard to change.

[Bernardo de La Paz]

9. Yes, most of that 3.7% was about 2.5% or more the first day, Nov 6. . . . nt

[bucolic_frolic]

3. "rattled by the Trump administration's policies." Trump is eating the government.

now we're getting somewhere.

[Raftergirl]

5. Who are these dumb businesses and consumers who thought HWSRN would be good for the economy?

[Skittles]

6. well that didn't take long

and they have a long, long way to go

[progree]

7. As for the consumer sentiment part of it (graph)

Last edited Sun Feb 23, 2025, 07:09 AM - Edit history (1)

DU thread on that: https://www.democraticunderground.com/10143401252
(I ran smack into the Reuters paywall in the OP above, so I don't know what they are saying about the business activity. But here's a graph on consumer sentiment going back to 1992)

http://www.sca.isr.umich.edu/



The red dot is the latest report: 64.7. The solid black line is the 3-month moving average. They apparently place the 3-month moving average in the middle of the three, so that's why there's no 3-month moving average for February. (The dotted line is the actual monthly numbers)/

Notice today's reading is the lowest in the entire history of the graph, which begins in 1992, with the exceptions of the housing bubble crash period and around the beginning of 2012, which I have no idea what caused that, and the peak inflation of 2022-early 2023.

https://data.sca.isr.umich.edu/data-archive/mine.php
(it goes way way back, I just included the following to show what the two recent peak points on the graph are -progree)
1 2023 64.9
2 2023 66.9
3 2023 62
4 2023 63.7
5 2023 59
6 2023 64.2
7 2023 71.5
8 2023 69.4
9 2023 67.8
10 2023 63.8
11 2023 61.3
12 2023 69.7
1 2024 79
2 2024 76.9
3 2024 79.4 (Local high point -progree)
4 2024 77.2
5 2024 69.1
6 2024 68.2
7 2024 66.4
8 2024 67.9
9 2024 70.1
10 2024 70.5
11 2024 71.8
12 2024 74 (local high point -progree)
1 2025 71.7
2 2025 64.7 progree added this line -- from today's report

[Cognitive_Resonance]

10. Radicalism is bad for business. nt

[Bernardo de La Paz]

11. A radical environment is bad for business, but in some cases good for innovative businesses.

Muck's mistake is confusing the government for a business competitor. Government is actually the foundation of stability that allows innovative radicalism to work for some businesses.

Moving fast and breaking things can be disruptively productive when you have a great idea for a specific business.

It doesn't work if you break up the foundation of stability.

[DavidDvorkin]

12. It's Jimmy Carter's fault.