GDP fell .9% for the second quarterly decline and a strong signal of recession.

[Tomconroy]

https://www.cnbc.com/2022/07/28/gdp-q2-.html

The U.S. economy contracted for the second straight quarter from April to June, hitting a widely accepted rule of thumb for a recession, the Bureau of Economic Analysis reported Thursday.

Gross domestic product fell 0.9% at an annualized pace for the period, according to the advance estimate. That follows a 1.6% decline in the first quarter and was worse than the Dow Jones estimate for a gain of 0.3%.

Officially, the National Bureau of Economic Research declares recessions and expansions, and likely won’t make a judgment on the period in question for months if not longer.

But a second straight negative GDP reading meets a long-held basic view of recession, despite the unusual circumstances of the decline and regardless of what the NBER decides. GDP is the broadest measure of the economy and encompasses the total level of goods and services produced during the period.

[JohnSJ]

1. unemployment is at historic lows. CNBS and others are pushing the "recession" theme this

morning hard, while a few days ago they were pushing the inflation theme.

Those poor so-called financial analysts are so confused.

The fact is the fed is intentionally slowing down the economy.

Whether it will lead to a recession or not, no one really knows

[Johnny2X2X]

2. This

Even notable bears Goldman Sachs is saying a recession is 50-50 in the next 2 years, and 30-70 against this year.

[JohnSJ]

4. and they get paid big bucks to tell us it is a 50-50 chance. Ya have a coin?

[Tomconroy]

3. Employment historically was a lagging indicator except in 2008

when employers made massive job cuts early on

I expect this time employers will try to hang onto workers for as long as possible because they are so hard to come by. But I am already reading about planned layoffs in tech and investment banking. The canaries in the coal mine.

[Sympthsical]

7. We still have fewer jobs for population than we did before the pandemic

What the pandemic did was cause a lot of people to finally retire. This "historic low" is that millions of people abandoned the job market.

There were 157.5 million jobs in 2019. Right now, we're sitting at 158.11 million. Not included? Population growth.

So that "Historic low!" is disguising a lot of the damage the pandemic did.

Mix in wage increases being utterly outpaced by inflation, and the economy is not great. People remain checked out and don't find the economy worthwhile enough to re-enter it.

There is going to be a lot of lipstick being applied to this pig. I get it. Election coming, etc. etc. People want to put the rosiest possible spin on everything.

Which is fine. Just as long as we're all aware that we're holding the lipstick and getting our Degas on.

(Edited to changed numbers, because I misread something)

[peppertree]

5. You can bet Repugs are popping champagne right now

Or in Kavanaugh's case, boofing beer and vodka (not that he needed a GDP decline to do that).

[PSPS]

6. There's no such thing as a recession with low unemployment

But pretending there is furthers the interests of the oligarchs who own the media.

[Alexander Of Assyria]

15. Shhhh! The mass media is at fever pitch with Recession!! Meanwhile historical employment of

workers and huge wage gains…workers with huge wage gains AND all working??!
A sad for the corporate media all round!

The business media is also not the workers friend!

[napi21]

8. Yes, and all I keep hearing on MSNBC is "Believe it or not, THIS is what we're looking for!"

Another annalist said raising int. rates is the std. way the Fed controls inflation, but it won't work this time because there are still problems with the supply chains & the war, neither will be fixed by int. rates. I hate to say it, but I don't believe there's much the Prez or the Fed can do except ride it out, & I'm afraid it will hurt the Dems in Nov. & maybe even 2024!

[Alexander Of Assyria]

16. What hurts is the slanted media, coup ok or not ok!? U decide...media already not certain!

[louis-t]

9. .9% is not an indicator of recession.

It's an indicator that the media is running out of things to hit Biden over the head with.

[Emile]

10. Many of these financial analysts blow smoke out their ass

to fuel republican propaganda.

I wouldn't take this recession talk to seriously.

[Baggies]

11. Will likely continue downward

The housing market, especially new starts, is already being felt and will get worse. Also food shortages are on the horizon.

[Fullduplexxx]

12. Nope ... not a strong signal

[progree]

13. We're not likely to be helped by the NBER - they call recessions at the TOP of the economy

Per the NBER ( http://www.nber.org/cycles/recessions_faq.html ), recessions (contractions) begin at the peak of the economy and end at the trough (bottom) of the economy. And expansions (recoveries) begin at the trough of the economy and end at the peak of the economy.

One can see the recessions (the gray bands) beginning at about the point that unemployment is lowest in the business cycle.
https://www.nber.org/research/business-cycle-dating

(The NBER is the National Bureau of Economic Research, and has been the defacto arbiter of when recessions begin and end for many decades. They use a broader range of data than does the Bureau of Economic Analysis does -- the BEA is the agency that compiles the GDP reports like this morning's. Unfortunately, the NBER often takes a year or longer to call recessions and expansions.)

=======================================

As for why we're having GDP contraction (Q1 at -1.6% annualized, Q2 at -0.9% annualized), I guess supply chain disruptions, causing huge drops in productivity. This is from the latest BLS productivity report --

http://www.bls.gov/news.release/prod2.nr0.htm

Nonfarm business sector labor productivity decreased 7.3 percent in the first quarter of 2022, the U.S.
Bureau of Labor Statistics reported today, as output decreased 2.3 percent and hours worked increased 5.4 percent. This is the largest decline in quarterly productivity since the third quarter of 1947, when the measure decreased 11.7 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the same quarter a year ago, nonfarm business sector labor productivity decreased 0.6 percent, reflecting a 4.2-percent increase in output that was outpaced by a 4.8-percent increase in hours worked. (See table A1.) This is the largest four-quarter decline since the fourth quarter of 1993, when the measure also declined 0.6 percent.

I'm hoping the explanation is supply-chain, which has been easing.

It is possible that a tight labor side can be part of the economic output reduction as well.

To me, it doesn't feel like labor force nirvana when wages / salaries are not keeping up with inflation. And my life savings and fixed-dollar annuity is rapidly eroding in purchasing power.

[roamer65]

14. Sounds like a very moderate recession so far.

[bigtree]

17. not a strong sign of recession. Stop the hype.

...not with 2.8M jobs added just this year.

Unemployment at 3.6% and more than 1 million jobs created in the second quarter alone. Consumer spending is also continuing to grow, despite inflation.