Taps Coogan – June 20th, 2022
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The Atlanta Fed’s ‘GDPNow‘ modeling for estimating quarterly real GDP, has dropped to 0.0% growth for the second quarter, down from roughly 2.5% in mid May.
The primary driver of the decline since mid May is weakness in consumer spending and falling residential investment relative to expectations.
The ‘zero’ growth estimate follows negative 1.3% real GDP growth in the first quarter due to a record trade deficit.
The technical definition of a recession, arbitrary as it is, is two consecutive quarters of declining real GDP.
The ‘good’ news is that the Atlanta GDPNow tool does not have a very good track record for accuracy and the St. Louis Fed real GDP forecast remains around 2.66%.
This does not make a technical recession ‘official’ but it certainly isn’t a good sign.
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