The Massive Prop Barely Holding up the US Economy Cracks

by Wolf Richter
Wolf Street

“The so-called car recession”: Ford, AutoNation wave red flags

It was the second warning in two days: auto sales – last year one of the few booming sectors in the US economy – are exiting the freeway and turning south on a road full of potholes. And that would come at the worst possible time.

The debt-fueled growth of this economy is already fizzling. On Friday, first quarter GDP growth was revised down to 0.8% on an annualized basis. “Annualized” means that if this awful pace continues, growth for the year will be 0.8%! Second quarter growth was a meager 1.2% annualized. For the first half, annualized growth amounts to 0.9%, the worst in four years.

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