Wait. There’s Another Economic Indicator That’s Plummeted in 2018.

Hold on. An hour ago I wrote about mortgage applications being down 22 percent in 2018. “Off the top of my head, I can’t think of any other important economic indicator that’s down 22 percent over just the past year,” I said. “In fact, I can’t think of anything that’s close.”

Well, a few minutes after I wrote that the Federal Reserve set me straight:

A 20+ point drop in the business activity index is roughly a decline of a third. A 40-point drop in the business climate index—that is, from 40 to zero—is about a 100 percent decline. Now, these numbers obviously bounce around a lot, and even a 100 percent decline is fairly common. Still, it ain’t good.

I don’t really understand this, unless it’s nothing more than a decline from an unsustainable burst of optimism at the beginning of the year. In any case, it’s pretty obvious that the Republican tax cut hasn’t been well received by the business community. Sure, any tax cut is good, but after watching it in action for the past year they’re really bearish on the future business climate. They’re obviously seeing something that the rest of us aren’t.