Global Economy Is Sinking Into Recession

It bears repeating that the US economy is merely one part of the global economy—and that the global economy is every bit a train wreck as well.

Based on the latest Purchasing Manager Index data from S&P Global, the global economy ended July on the verge of contracting. Rising global inflation and food insecurity are taking their toll worldwide.

Companies blamed tightening financial conditions, heightened uncertainty linked to the Ukraine war, shortages and, most importantly, high inflation for the deteriorating business environment. Optimism about the year ahead likewise fell further in July, prompting a pull-back in global hiring.

Encouragement came from a weakening of global inflationary pressures, with average prices for goods and services rising at the slowest rate for ten months thanks in part to lower input cost inflation, though also attributable to the recent slowing of demand growth.

Things are deteriorating everywhere. No one will be spared.