Summary
Insisting upon the precise definition of recession will be an even more fraught task in light of the unequivocal deterioration in economic activity reflected in today’s 0.9% contraction in Q2 real GDP. Yet real consumer spending continued to forge ahead and the job market still has legs. It is too early call the end of this expansion, but the hour is fast approaching.
Can’t Completely Wave Away Weakness
The U.S. economy contracted at a 0.9% annualized rate in the second quarter (chart). This is the second straight quarterly decline and while that is not the official definition of recession, it will not stop talk about one nor will it do much to convince the 55% of Americans surveyed by You Gov & The Economist who think the U.S. economy is already in recession. To be clear, we are forecasting recession, but we do not have it starting until early next year. The strength of the labor market today is the best argument against those saying we are already in recession. For a full discussion on the definition of recession and why we still think we are not yet fully in one, please see our special report from earlier this week. READ FULL ARTICLE>>