Is the USA in recession?

Is the USA in recession


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Hygro

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Vote your prediction.

In Q1 of 2022, GDP growth was –1.4%

If there's any contraction in Q2, that will tell us then that, here right now, we are in a recession.

What's your prediction, is the USA in a recession right now?
 

Ajidica

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Estebonrober

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Is it possible for the federal government to spend too much money?

MMT would imply the inflation is an indication we finally crossed that line... took almost 50 years. That also mean syou buy that this inflation is being caused by the money supply and judging by the PPP loan forgiveness stories I'm hearing these days it is not impossible.

"socialism for me, capitalism for thee"
 

Joij21

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Vote your prediction.

In Q1 of 2022, GDP growth was –1.4%

If there's any contraction in Q2, that will tell us then that, here right now, we are in a recession.

What's your prediction, is the USA in a recession right now?

Yes and I can predict when it will crash the stock market

Spoiler :
This coming Fall
 

Lexicus

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Hygro

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Is it possible for the federal government to spend too much money?
Definitely.

A fair, egalitarian government would only need to run small deficits most of the time.
 

Hygro

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Is there an idea of what caused that -1.4%?

The Federal government not spending enough money

Consumer spending is way up. Business investment is way up. And last year GDP grew (recovered) by a huge amount. Seems like a government spending drop is the answer. But with so much existing money in circulation and the private sector spending it I wonder if we returned to growth this quarter.
 

Lexicus

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Consumer spending is way up. Business investment is way up. And last year GDP grew (recovered) by a huge amount. Seems like a government spending drop is the answer. But with so much existing money in circulation and the private sector spending it I wonder if we returned to growth this quarter.

Well, as you've noted many times inequality makes spending less efficient than it might be, as does the insistence on giving money mostly to those who already have it (e.g. PPP, giving businesses loans so they could meet their payrolls, rather than just giving individuals money).

"government didn't spend enough money" is to some extent a non-answer to the question, it's an answer that must be true in some sense but it doesn't have much explanatory power on its own.

I don't know whether growth will return this quarter - I think the war and supply snarls may be playing a role and those problems clearly haven't gone away.
 

Harv

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If there's any contraction in Q2, that will tell us then that, here right now, we are in a recession.

I thought the metric definition of a recession is two consecutive quarters of negative growth, but in the USA, it is when they declare it to be a recession.

GDP growth -1.2%? Is this nominal growth or real? Inflation is running 8.5% and rising much faster than global temperatures, but as discussed in an earlier thread, this (the inflation heating up, not the earth) is nothing to worry about.

Consumer spending is way up. Business investment is way up. And last year GDP grew (recovered) by a huge amount. Seems like a government spending drop is the answer. But with so much existing money in circulation and the private sector spending it I wonder if we returned to growth this quarter.

Well we had the pandemic over the past two years and a shutdown two years ago and I think economic indicators will be all over the place.

Something I do not understand is why interest rates are so low when inflation is running 8.5% and rising.
 

Lexicus

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Something I do not understand is why interest rates are so low when inflation is running 8.5% and rising.

Current inflation has little to do with interest rates as far as I can tell. Hiking interest rates will only stop inflation by tanking the economy.
 

Farm Boy

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Not enough stuff. Less housing availability. Less fuel availability. Less meat. Less eggs. Less tires. Less spare parts. If you haven't been shopping store brand and budgeting taxes on the already owned, you've been riding the pandemic bubble.
 

Birdjaguar

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Is there an idea of what caused that -1.4%?
Most of it can be tied to the decline in exports and the increase in imports. Annualized imports were up ~17% and exports down ~6%. Apparently if you exclude the net exports from the calculation, GDP was up 1.7%
 

Remorseless1

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There have also been work stoppages in various countries over the past two years, which accounts for the decline in exports. Throw millions of Americans stuck at home, satisfying their addiction to "new stuff." Look at the disruptions caused by Taiwanese computer hardware shortages due to Covid outbreaks - automobiles, smart phones, tablets, etc. have gone way up in price.

Incidentally, there is a discussion surrounding the effect of Covid relief payments on inflation. Personally, I think the impact was negligible.
 

Hygro

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I thought the metric definition of a recession is two consecutive quarters of negative growth, but in the USA, it is when they declare it to be a recession.

GDP growth -1.2%? Is this nominal growth or real? Inflation is running 8.5% and rising much faster than global temperatures, but as discussed in an earlier thread, this (the inflation heating up, not the earth) is nothing to worry about.
I'm seeing new numbers but it's adjusted for inflation: a –0.4% change.

You are correct about the metric, and that is what I wrote. Q1 is over, and has an official measure (subject to change). We are in Q2. So in the future, we will have numbers for Q2, and will at that time know if us now (our future past) are in a recession.
 

TheMeInTeam

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pretty likely, and not too surprising given the shockwaves from 2020 and printing money. it's not a machine where you just turn the switch on and off vs leaving it running and observe no difference between the two.
 

Birdjaguar

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Most common indicators of recession risk
  • Accelerating inflation: CPI up 1.3% for March driven by food and fuel (up 8+%); core CPI up .3% for March and 6.5% year over year. Durable goods and used cars and trucks down for the month. Question, is inflation peaking now or soon? Fed rate increases.
  • Payroll Growth: We are reaching maximum employment levels when compared to the past; unemployment is 3.6% (pre-pandemic level was 3.5%); production and non supervisory hourly wages up 6.7% year over year; half of the payroll growth in March came from leisure and business services sectors hit hard by pandemic.
  • Inverted yield curve: currently positively shaped, rising.
  • Rising unemployment claims: currently at a 50 year low with 11 million job openings
  • Index of leading Indicators: Up.3% in March with 7 of 10 indicators being positive; Up 1.9% for last 6 months.
Looks pretty good to me.
I expect stocks to be volatile through the election (day traders making money?). Given that corporate profits are doing well, no crash? Maybe a buying opportunity later?
 

Hygro

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it's not a machine where you just turn the switch on and off vs leaving it running and observe no difference between the two.
That's right, it's not that.
 
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