Macy’s and Costco sound a warning about the economy

It really has to do with slow downs in manufacturing, construction, sales, and employment that feed off each other. And at a deeper level with liquidity cycles and whether conditions are easing or tightening. Conditions are tightening, and of the four markets I mentioned earlier, all are down. Employment is hanging in there the best, but that’s always the last domino to fall. We may well already be in the recession, but it’s only usually called after the fact.

It's pretty much bog-standard economics. We like an overheated economy, so we keep pumping it up until finally somebody swerves. Then we get a recession. Then we promise to do better next time. And we don't.

So the longest recession calls I can remember were for the 2020 recession, which was about 13 years since the last one. It was obvious for nearly a decade that the economy was overheated, but it just kept going. Were it not for COVID, it might well have kept going.

It's only been a few years since then, and we're still doing the anti-recession measures from the last one. Consumers still aren't feeling great about it.

I think happened is that the last recession was pretty brief. And right now we're more suffering shocks from the Ukraine war (which spills out into oil prices, which spills out into everything else). So it's not great for consumers, but the economy as a whole is actually still ticking along.