U.S. Steel Plants Are Going Idle, But The Fed Continues To Perpetuate The Myth That Everything Is Just Fine
U.S. Steel Plants Are Going Idle, But The Fed Continues To Perpetuate The Myth That Everything Is Just Fine by Michael Snyder for The Economic Collapse Blog
Even though there is a tremendous amount of evidence to the contrary, the Federal Reserve continues to insist that the U.S. economy is in good shape. On Wednesday, Federal Reserve Chair Jerome Powell told the nation that “the economy has performed relatively well” in 2019 and he insisted that “the baseline outlook is a good one.” Of course he didn’t say anything about our collapsing manufacturing numbers, the worst global trade numbers since the last recession or the “bloodbath” in the U.S. trucking industry. Powell did concede that “the risk of less favorable outcomes has risen”, but other than vague statements like that he really didn’t acknowledge our growing economic problems at all. Considering the fact that Powell has more power over the U.S. economy than anyone else in the entire country, this should deeply concern all of us. To me, Powell’s performance on Wednesday was quite reminiscent of the moment in 2008 when Fed Chair Ben Bernanke told us that the Federal Reserve was not “currently forecasting a recession” after a recession had already begun.
As I have been documenting for weeks, evidence that another major economic downturn has already started can be clearly seen all around us.
For example, we got some very alarming news from the steel industry on Wednesday. When the Trump administration slapped a 25 percent tariff on steel imports last year, that was supposed to greatly help the U.S. steel industry. But instead, a dramatic drop in demand due to this new economic downturn is forcing steel companies to take dramatic measures. According to CNN, U.S. Steel just announced that it will be shutting down a blast furnace in Gary, Indiana and another one that is located just outside of Detroit…
Pain has returned to the US steel industry despite the tariffs put on imported steel last year that were designed to help.
Late Tuesday US Steel announced it will idle two of the blast furnaces where it makes steel, one in its flagship mill in Gary, Indiana, near Chicago, the other in Ecorse, Michigan, near Detroit. The idled furnaces will cut production by about 200,000 tons of steel or more a month, the company said.
“We will resume blast furnace production at one or both idled blast furnaces when market conditions improve,” said the company.
But when will market conditions improve?
After this new economic downturn is over?
Of course U.S. Steel is not the only steel producer that is hurting right now. In fact, Nucor and Steel Dynamics have both cut profit forecasts…
US Steel’s action follows similar warnings Monday from Nucor, the nation’s largest steelmaker, and Steel Dynamics. Both are now forecasting lower profits. Nucor pointed to weaker demand from the US auto industry.
Sadly, the truth is that major industry after major industry is deeply suffering at this moment…