“Economic Hurricane” – Hyperbole Or Real Possibility?

An “economic hurricane” is coming. That ominous warning comes from Jamie Dimon, CEO of J.P. Morgan Chase.

“I said there were storm clouds. But I’m going to change it. It’s a hurricane. Right now it’s kind of sunny, things are doing fine, and everyone thinks the Fed can handle it. That hurricane is right out there down the road coming our way. We don’t know if it’s a minor one or Superstorm Sandy. You better brace yourself.”

Of course, he isn’t the only CEO feeling this way. The most recent CEO Confidence Index suggests that most leaders are concerned about the economy over the next few quarters.

economic hurricane, “Economic Hurricane” – Hyperbole Or Real Possibility?

Adding to that, the NFIB Small Business Survey also suggests that the economic backdrop is deteriorating rapidly. The chart below shows the number of firms expecting an economic improvement over the next 6-months. That number plunged to the lowest reading ever.

economic hurricane, “Economic Hurricane” – Hyperbole Or Real Possibility?

Of course, businesses are gloomy because consumer confidence, which is where they derive their revenue and profits, suggests dismal growth ahead. Our consumer confidence composite index (UofM and Conference Board measures) of expectations less current conditions is already at levels associated with previous bear markets and corrections.