Using your preferred definition of recession (you know it when you feel/see it), what is your near term outlook for a US recession?
- US is in a recession now.
- A US recession will start in Q3 or Q4 this year.
- No US recession this year.
0
voters
I do not think we will know. I think the data will be tampered with to spin the US economy in the best light possible.
6 Likes
By September millions will have been laid off and thousands of bankruptcies will have happened. The housing market will have plunged. The bond market might crash depending on the tax cuts.
We are entering a global great depression.
2 Likes
4th option: We will come very close to NBER declaring one six months after the fact, but it will likely feel like one to some starting in the third quarter of this year. I think we could be negative, positive, negative for GDP over the first three quarters.
That prediction (that people feel it) changes to the second (current) quarter if 1st qtr GDP indeed comes in negative especially if more than -2%.
The long backward nature of the NBER pronouncement makes this very prone to speculation and opinion.
3 Likes
I’m going with we are in a recession now.
Some data points.
GDPNow forecast says -2.2% in Q1. Is it wrong by more than 2%?
From wall street journal:
On trade (and this is just 1 country):
And another:
3 Likes
Two things: That is of course a forecast and it doesn’t include gold - which I don’t know if it should or not since it didn’t previously. And, recessions are not measured by a single quarter (or even two consecutive quarters) of negative GDP. NBER uses at least a dozen different metrics to come to their somewhat subjective conclusion.
If second quarter GDP is positive, would you still state that we had a recession in the first quarter? I certainly would not.
2 Likes
Yes, and I did write the word forecast.
If the Fed modelers think these gold transactions should be included, that’s good enough for me. I would expect it to not matter much relative to total gdp in the long run.
This is why at the start of this thread, I wrote
Sounds like you are asking for more specificity.
I’ll try.
I wrote
We are in Q2 right now, so I guess I was making a statement about today, not using any particular recession definition.
I did reference some latest estimates of Q1 gdp growth (GDPNow), maybe because that’s the latest estimate of the current situation, by that measure.
So I would say I am using “real time” gdp as my measure of recession when I wrote we are in a recession now. But I recognize this is probably not measurable. And for it to be meaningful, it should last for awhile.
Funny how the NBER keeps their criteria fuzzy (they know a recession when they see it).
Overall, I would say our gdp slowdown started in Q1 after new executive policies started to roll out and the slowdown continues today.
And there are data to support that claim, posted above.
When actual GDP numbers come out for Q1, Q2, we can check.
But executive policies might change when we get “deals.”
No one knows.
What do you think?
2 Likes
Heh. I think as I already stated: negative, positive, negative with no declared recession (based on where we are at this moment with 10% tariffs) - but the market and consumers might react is if we are in one.
That changes if 20% tariffs come back. I think we will have moderate recession in that case. My base case is that those don’t come back.
2 Likes
I think in this case the critical issue will be initial unemployment claims, not GDP (whether or not adjusted for gold imports). The Fed will be watching unemployment like a hawk.
Wendy
7 Likes
Dear Wendy
Roughing out some numbers there will be more unemployed than the Covid spike.
Greater than 300 employees per small corporation
Possibly 30k closed small businesses
Or divisions of small corporations ended
9 m unemployed by summer 2026
Our crowdsourced recession forecast is here.
According to us, the most likely outcome is recession now or in 2nd half of 2025 with majority saying 2nd half.
1 Like
and one vote for we won’t have accurate data to know
4 Likes
Nothing in the spotlight is going to age well.
1 Like
Continuing claims takes into account two aspects of unemployment: employed folks becoming unemployed (initial claims) and unemployed folks becoming employed.
When the former increases or the later decreases, indicating less economic activity, continuing claims increase.
The latest from today:
6 Likes
So far, our crowd sourced recession forecast appears accurate.
The data says the slowdown continues.
And also:
1 Like
Plenty of layoffs in this. A corporation like Apple makes it up somewhere.
We could just have raised corporate taxes to incentivize a factory buildout. We will still need to raise corporate taxes. Meanwhile we will waste a few years.
Apple (AAPL) stock sank late Thursday after the company said it expects to face a $900 million headwind as a result of tariffs in the current quarter. Pressed by analysts on potential tariff impacts beyond its June quarter, CEO Tim Cook declined to comment saying he didn’t want to “predict the future.”
More good info on the economy was released Friday.
For April,
- Consumer spending, as measured by real PCE, grew about +0.1% versus March, or about +1.2% annually, which is weakly positive growth.
- The change in the trade deficit is fluctuating wildly month to month, because a golden age is happening.
- March imports grew a lot relative to exports as people ordered in advance of expected tariffs, so the trade deficit increased, which subtracted from Q1 GDP.
- In April, this reversed, imports declined relative to exports, the trade deficit shrank, which adds to GDP (grows GDP) for Q2.
- For some kinds of investment (another broad component of GDP), durable goods orders declined -6.3% and new home sales grew about +11%, so a mixed picture (these have both been weak over the last year or so).
It’s not easy to back of the envelope estimate the net effect of all of this (incomplete) information, especially the overall contribution of business investment in April.
GDPNow shows a big boost to GDP for Q2 from the reversal in trade from March to April, now showing +3.8% GDP growth in Q2. It will be interesting to see how economists absorb the latest data and forecast accordingly.
For now the trend in consumer spending, the largest portion of GDP, is certainly weak, with negative or near zero growth in Jan, Feb and Apr and a large positive swing in March. Overlaid on that are large month to month fluctuations in the trade deficit which are alternately incrementally subtracting and adding to GDP (and the causing GDP to decline or grow).
It will be interesting to see the effects on Q2 GDP of business investment and government spending, but we might not have very complete data for these until we get the actual Q2 GDP estimates in late July.
Edit: Added wording to make clear the above is focused on changes in GDP, or GDP growth/decline with respect to changes in trade deficit (exports less imports, negative if deficit).
1 Like
This is like 1999 pro forma earnings. The accounting is bogus.
To nit-pick, it doesn’t add to GDP; it just doesn’t subtract as much.
Since income was up more than spending, this means that savings increased. Worse things could happen.
DB2
Right, I added some wording to make clear the focus is on GDP changes, or GDP growth/decline.
Changes in (exports - imports) cause changes in GDP.