What do General Motors(GM), JPMorgan Chase (JPM), Microsoft (MSFT), IBM (IBM), Proctor & Gamble (PG), Citigroup (C), Johnson & Johnson (JNJ), Coca-Cola (KO), Oracle (ORCL), and Caterpillar (CAT) all have in common?

1) They are among a long list of S&P 500 companies with negative year-over-year revenue growth.

2) They are not in the Energy sector.

With 80% of companies already reported, S&P 500 sales are on pace to decline (year-over-year) by 3.1%, the second consecutive quarter of negative growth.

The last two times we saw declines in revenue growth were back in 2008 and 2001, during U.S. recessions. Today the U.S. economy is still expanding, but corporate sales are not. Much of this decline has been blamed on the stronger Dollar which has made U.S. multinationals less competitive.

Indeed, the Dollar’s historic advance over the past year has been problematic for companies with overseas business, and I have described it as the Black Swan in plain sight.

But it is not just the stronger Dollar that is to blame. Nominal GDP growth in the U.S., at 3.3%, is the slowest on record for an expansion. In fact, we have seen many recessions with higher nominal growth than this. It should hardly come as a surprise, then, to see corporate profits slowing as well.

“It’s Just Energy”

With the U.S. stock market still higher over the past year, many have dismissed the decline in company sales. “It’s just energy” has been the most common refrain as energy companies have been hit hard by the sharp decline in Crude prices. In looking at the actual data, though, we find that it is hardly “just energy” that is showing top line weakness.

Of the companies that have reported thus far, 48% have shown negative year-over-year revenue growth. Of these, 142 companies are outside of the Energy sector. Below is a small sampling of that group.

The Voting Machine

As I wrote a few months back, it is not earnings and sales that drive stock prices in the short run but the multiple investors are willing to pay for those earnings and sales.

As earnings and sales declined, investors initially seemed happy to pay a higher and higher multiple, but that enthusiasm appears to be fading here. The Dow has gone nowhere over the past eight months, creating an illusion of stability with increasing signs of fragility.

The revenue recession also comes at an interesting time, when the Federal Reserve is closer (according to the Futures markets) to a rate hike than it has been at any point during the expansion that began in June 2009. Will the Fed really hike rates in September with negative earnings and sales growth or will they once again push back their “dot plot” plans? A better question after nearly seven years of 0% is whether market participants will still view a push back as bullish (see: when lower for longer is not enough). We’ll soon find out.