I was listening to an economist the other day talking about the continued slide in the price of oil. He said that despite the lower fuel prices there did not appear to be the significant bump in consumer activity as some have predicted.
We have argued that pressure from the low price of oil, caused in large part by the Saudis, would negatively affect the American heartland where the fracking revolution had been rolling. Now recession appears to be creeping across the prairie states and into Texas, which has been a key driver of economic growth (such as it has been) in the USA post Crash.
Some economic analysts are even using the word “depression.” At least in terms of the oil and gas industry.
For the 13th month in a row, The Dallas Fed Manufacturing Outlook was contractionary with a stunning -34.6 print following December’s already disastrous collapse back to -20.1, post-crisis lows. With “hope” having plunged back into negative territory (-2.2) in December, January saw a complete collapse to -24.0 as one respondent exclaimed, “we expect the continued depression in the oil and gas industry to negatively impact our customer base and result in significant demand reduction.“