Even as Biden and his minions are telling us not to worry about entering a recession, but here we are right smack dab in the middle of one. A Depression is usually marked by two straight quarters of negative GDP growth. In the first quarter of this year, we had negative growth of 1.6%. We were told that the second quarter would be much better, but the Atlanta Fed reported a negative 2,1% and it could get worse when the next two adjustments are made.
The GDP has now fallen 7 months in a row. The next thing we have to worry about is stagflation. Stagflation is the combination of slow GDP growth and high inflation and we have negative GDP growth. It gets worse for businesses that are seeing high inflation with interest rates expected to jump higher to combat inflation. The higher interest rates force consumers to make a choice and many times they hold of on major purchases such as cars and appliances.
The Federal Reserve Bank of Atlanta’s GDPNOW economy tracker plunged even deeper into negative territory on Friday, falling from minus one percent to -2.1 percent. For nearly two weeks prior to this week, the tracker had shown zero growth.
The Atlanta Fed reported on Friday.
Recent forecasts for the GDPNow model are available here. More extensive numerical details—including underlying source data, forecasts, and model parameters—are available as a separate spreadsheet. You can also view an archive of recent commentaries from GDPNow estimates.
Latest estimate: -2.1 percent — July 1, 2022
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2022 is -2.1 percent on July 1, down from -1.0 percent on June 30. After this morning’s Manufacturing ISM Report On Business from the Institute for Supply Management and the construction report from the US Census Bureau, the nowcasts of second-quarter real personal consumption expenditures growth and real gross private domestic investment growth decreased from 1.7 percent and -13.2 percent, respectively, to 0.8 percent and -15.2 percent, respectively.
The next GDPNow update is Thursday, July 7. Please see the “Release Dates” tab below for a list of upcoming releases.