I have marked the areas where the data got to similar levels as we currently have. With the exception of the mid 1950s, all other occurrences happened when we were in recession or very nearly in one. The last two times this happened there are easy explanations. In 2001, it happened in the month after the 9/11 attacks when there was quite an element of shock The last time it happened, the world was in a major panic after the Lehman collapse. What exactly is going on now? There certainly is no panic around to affect business on this scale. The retail sales data has definitely been soft lately so it is possible there was a buildup in inventory. It would have to be a pretty broad based inventory buildup across many industries to cause such a big drop in new orders though. This could be a sign that we are already in recession. Even though the market has so far chosen to ignore this data, there may come a day when it doesn't.
Bob
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