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This could be the 'black swan' for the economy

We are in the midst of a deceleration in the economy, and the chain of dominoes leading to a recession has started to fall. First, it was a weak global economy. Then, multinationals and business-to-business companies were hit by the resulting decline in global trade and commodity prices. Now, consumers are starting to feel the repercussions as they draw down their growth in spending on discretionary goods and services, which we saw reflected in the first-quarter GDP report.

This is the foreshadowing of a recession. We saw similar indicators prior to recessions in 2001 and 2008. Although there is potential for economic indicators to flip, the current momentum and indicators suggest that the U.S. economy will get worse before it gets better. But we now we have a sense of what the black swan will be for the economy: the weak consumer.

Friday's retail numbers are very significant in telling us just how weak the consumer will be in the second quarter. It is the first critical pit stop on the road to either economic recovery or recession and gives us our first taste for where Q2 GDP will land. Consumers have been propping up the economy over the last two quarters, and as the first month of Q2, this number is the first indicator we'll have into the trajectory of consumer sentiment, and whether deceleration has continued. If the numbers fall below expectations, this will require a huge rebound...