Recession Rumblings

After contracting at an annualized rate of 1.6% in 22Q1, GDP again shrank in 22Q2 by 0.9%. The reason; inventories reduced 22Q2 GDP by 2.01 points. Similarly, net exports boosted GDP by 1.43 points after reducing it by 3.23 points in 22Q1. These extraordinarily large swings are due to covid-induced temporary changes in consumer spending patterns that have reversed. This is a weakening economy that’s not in recession, yet.