In a July 24 press release, the Packaging Corporation of America (PCA) reported that cardboard box sales dropped 9.8 percent in the second quarter of 2023. The number was among the largest drops, ranking next to the 12.7 percent slump in the first quarter.
According to FreightWaves Research, the combined six-month decline of 22.5 percent in sales of PCA's cardboard boxes is the largest drop since early 2009. The company has now witnessed year-on-year downturns for the fourth straight quarter, which could also be a sign of demand returning to pre-pandemic levels after an unusual two-year spike.
While most Americans wonder what cardboard box sales have to do with the economy, the decline in sales is bad news for those considering the boxes as a critical barometer of health for the American economy.
According to InfoWars, everything from raw materials to final products coming at the door is wrapped in boxes. When there are less products made and sold, an economy will require fewer boxes. The outlet also noted that the box barometer isn't subject to government accounting trickery.
FreightWaves pointed its finger at the Federal Reserve's aggressive interest rate hikes. These hikes, it noted, have controlled the demand for cardboard boxes over the previous year. The Fed has increased benchmark rates by 500 basis points since early 2022 to curb historically high inflation. (Related: Bond investors warn: Brace for INEVITABLE RECESSION caused by Fed’s continued RATE HIKES.)
The supply-chain intelligence firm also predicted that demand for boxes may enter an extended downturn.
Despite the dwindling sales of cardboard boxes being a red flag, officials at the federal government still refuse to predict a recession.
Treasury Secretary Janet Yellen announced a few weeks ago that although economic growth has slowed, "our labor market continues to be quite strong – I don't expect a recession."
Fed Chair Jerome Powell also shared Yellen's sentiments. He stated that staff economists at the central bank now predict an evident slowdown in growth beginning later this year. Powell continued that "given the resilience of the economy recently, they are no longer forecasting a recession."
An increasing number of people in general now believe the U.S. has avoided the grip of a recession in spite of the Fed pushing interest rates to the highest level in 16 years. This is because of ongoing labor market strength and a second quarter GDP growth much stronger than expected.
However, this optimism appears to be premature. First, it appears unlikely the U.S. economy can prevent a critical decline – given the fact that the Fed has taken away its lifeblood, which is easy money.
The American economy was made on artificially low interest rates and quantitative soothing and removing it is like draining half the oil out of an engine. It might run for a little while, but the engine will ultimately break down – and it is just a matter of time before it happens.
Second, one just needs to simply look at 16 years ago. Americans can recall that everybody believed the economy was all right in 2007 too, despite the fact that the housing market had already broken and the Fed was slashing interest rates. A year later, everything came crashing down.
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Watch this clip from the "X22 Report" that explains why the Fed does not forecast an economic recession.
This video is from the GalacticStorm channel on Brighteon.com.