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Picking up on the theme we introduced in our previous installment, we can't help but notice that the number of U.S. companies announcing that they are cutting their dividends increased to 28 in January 2014.

(click to enlarge)

That's significant in that it only takes 10 companies to announce dividend cuts in a given month to indicate that recessionary conditions are present within the U.S. economy.

So it would seem then that the U.S. economy is back in what we would describe as a microrecession, which might be best thought of as when recessionary conditions are present, but are perhaps not of sufficient magnitude, scope or duration for the National Bureau of Economic Research to officially declare that the economy is in recession.

But really, if you look at what dividends have been communicating since mid-2012, it's not so much a question of whether the U.S. economy is once again experiencing the kind of economic conditions that are consistent with being in a microrecession, but rather whether it ever really left.

That situation is something that has an effect on the nation's employment situation, which is something that we'll take on in our next post....

Data Source

Standard & Poor. Monthly Dividend Action Report. [Excel Spreadsheet]. Accessed 8 February 2014.

Source: Dividends: A Time For Increased Concern