Back in April 2025 mostlylong took a poll on the outlook for a US recession. Fully 92% thought that we were already in a recession or would be by the end of 2025.
As you know, the economy keeps chugging along, and this quarter is projected to grow by 5%. So why the pessimism? Is because of the political situation?
At any rate, take the bias into consideration when reading posts here.
DB2
Differences of opinion are what make markets…and also a more interesting METAR Board.
Wendy
Reminds me of this quote.
William Arthur Ward’s quote, “The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails,”
I’ve long had the same opinion, but I just role with it - mostly 'cause the board’s name is “Threats and Risks” not “Strengths and Opportunities.”
Hawkwin
If it bleeds it leads.
Since the erstwhile doomers club migrated… this board feels obligated to take some of their traditional role. But at least here you get some arguments, and can disagree politely.
How much of that growth is real, and how much is inflation? If a gallon of diesel is $8, selling it to a trucker adds $8 to GDP. When that same gallon was $4, it only added $4 to GDP. Either way, that gallon serves the same net economic purpose: moving roughly 45,000 pounds of product roughly 5-8 miles down the road.
Likewise, 2 pounds of ground beef at $8.99 per pound makes the same 8 hamburgers that 2 pound of ground beef at $2.99 per pound does. But at $8.99 per pound, it adds $17.98 to GDP while at $2.99 per pound, it only added $5.98 to GDP.
I’ve long felt inflation higher than the officially published numbers. In my personal situation, this year is an exception only because I bought a second plug-in hybrid and solar panels in 2025, so the spike in fuel and electricity prices are affecting me far less than they are others. Absent that benefit, my costs this year would likely have been spiking far higher than the published inflation rate. As it is, my savings in fuel and electricity are essentially being eaten by increasing food costs.
I can make it work because of those choices made last year. That said, my state has a mandatory property revaluation happening right now. Should that revaluation result in higher property taxes, that would be a cost increase that I would be facing that would not be directly captured in the inflation numbers.
Because of my personal costs consistently increasing faster than official inflation, I’ve rebased my own financial projections to assume 5% inflation, up from the 3% I used to assume. Were it not for the solar panels and plug in vehicles, I’d likely be questioning whether 5% is too low…
Regards,
-Chuck
It is inflation adjusted. From the GDPNow website:
The growth rate of real gross domestic product (GDP) is a key indicator of economic activity, but the official estimate is released with a delay. GDPNow forecasting model provides a “nowcast” of the official estimate prior to its release…
DB2
This board has always been overly pessimistic, even when it was still Mishedlo decades ago. Possibly because it consists of an older than average crowd, and a more financially conservative than average crowd.
Mish was the poster child for being overly pessimistic.
H1 2026:
GDP growth 1.8%
CPI inflation 3.5%
If by chugging you mean modest growth with too high inflation, then yes.
Good story.
How near to 5% do you believe Q3 GDP growth will be?
Have you not been following the news?
Most people have a sour view of the economy:
poll reported that just 27 percent of Americans approve of how [peace prize nominee] is handling the economy
I’d go with at least 4%, given the latest PMI report last week:
S&P Global US Flash PMI
https://www.pmi.spglobal.com/Public/Home/PressRelease/ed177f50167b4203ac490a961ea706be
US business activity growth accelerated for a fourth successive month in September to reach the fastest rate in over five years.
A further surge in service sector business activity was accompanied by a renewed improvement in manufacturing output growth.
Employment also rose sharply, with jobs added at a pace not seen for over four years, as firms sought to meet rising demand.
DB2
Rising inflation and rising interest rates are negatives for growth. Caution and pestmisim are justified.
Mush of the consumer market is slowing. GDP growth come from AI spending investment. People continue to ask if AI can deliver the expected profits. If AI profits fade recession is likely.
Personally I think AI is the future and many projects will be profitable. We shall see who is right.
I like Nvidia decision to fund large share purchases. Well managed industry leader w deep pockets. I expect them to continue to prosper. As always there are lots of naysayers out there. They are missing a nice profit opportunity. The overly cautious have trouble getting ahead. Not my problem.
This cannot be true. I have been assured by a poster hereabouts that California is a hell hole, that the entire state is failing, that its economy prevents entrepreneurs from starting businesses, that its education system has fallen through the floor, that its taxes are oppressive and accelerating, and that it’s simply a 21st century disaster in real time.
I couldn’t be that the poster is wrong, could it?
It may require you to do a deeper dive into the makeup of the nominal GDP growth rather than a google search and a headline. If things are going so well, why does California need an unprecedented wealth tax? Why are people and businesses leaving?
Is it possible GDP growth, particularly nominal, is not a measure of the broader health of the avg Californian? Can you articulate the relationship between the GDP growth and economic and affordability conditions?
Don’t come here to California, you’ll regret coming here to this place. Stay very very far away from here in California; it’s very expensive, ugly, and horrible, incredibly horrific. California is very dangerous; it’s not safe. Don’t even think about coming here to California, you’ll regret coming here for the rest of your life. Stay away from California at all costs.
GDP Q1 2026 = +2.5%
GDP Q2 2026 = +2.2%
The pessism is due to world and USA chaos with:
I can confirm most of the parts of California I saw from the Amtrak were industrial, garbage strewn areas. There was thar two hours of gorgeous Pacific coastline as well, if you are into that sort of thing. Oh, and sea otters, sea lions and stuff. And beautiful women walking around all over with a bunch of flashy cars and cool architecture. But other than that, mostly overcrowded industrial garbage strewn stuff.
Jk
Oh yeah ,I forgot. Mostly amazing weather too, if you like to be comfortable. Other than that ,no reason to be there
Sure, there’s always chaos in the world. But that is different than expecting the economy to crash. Remember that the poll was taken a year and a half ago and 92% of those who voted here though that we would be in a recession before the end of '25 or that one had already begun.
So far this century the US has had three recessions – an average of one every eight years. It used to be thought that the business cycle was four year long, so things have improved considerably.
DB2