Unexpectedly Intriguing!
August 7, 2013

The number of public U.S. companies announcing that they would be cutting their future dividend payments fell from 20 to 14 in July 2013. While this level of dividend cuts announced in a single month is still consistent with recessionary conditions being present in the U.S. economy, it does represent an improving situation as it appears that the U.S. economy is beginning to exit the microrecession that began back in July 2012.

Number of Public U.S. Companies Posting Decreasing Dividends, January 2004 through July 2013

By our definition, a microrecession represents a period of slow or negative economic growth for the nation that is either too limited in scope, severity or duration to qualify as an official period of recession, as might be determined by the National Bureau of Economic Research.

We'll note that the Bureau of Economic Analysis' recently revised GDP data now confirms what our dividend indicator has been communicating in real time - the pace of economic growth in the U.S. has been in the "cold" recessionary zone, as indicated by our two-quarter GDP growth rate temperature gauge:

Two Quarter GDP Growth Rate Temperature Gauge, 2004Q1 Through 2013Q2 (First Estimate)

Prior to its revision, the BEA's GDP data had indicated that the U.S. economy was growing at a somewhat faster pace.

As best as we can tell, it appears that the microrecession peaked in the fourth quarter of 2012. The U.S. economy would now appear to be exiting this period of microrecession, which has now lasted for over a year.


Standard and Poor. Dividend Action Report. [Excel spreadsheet]. Accessed 5 August 2013.

U.S. Commerce Department Bureau of Economic Analysis. Current-Dollar and "Real GDP". [Excel Spreadsheet]. Accessed 31 July 2013. - Note: Inflation-adjusted figures are actually presented in terms of chained 2009 U.S. dollars (not chained 2005 U.S. dollars).

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