When Germany sneezes ...?

Germany has slipped into recession as last year’s energy price shock takes its toll on consumer spending.

Output in Europe’s largest economy dropped 0.3% in the first three months of the year, following a 0.5% contraction at the end of 2022, official data showed Thursday.

The Federal Statistical Office downgraded its previous estimate of zero growth in gross domestic product (GDP) compared with the previous quarter. A recession is defined as two consecutive quarters of declining output.

“The persistence of high price increases continued to be a burden on the German economy at the start of the year,” the office said. “This was particularly reflected in household final consumption expenditure, which was down 1.2% in the first quarter of 2023.”


And in the US the first two quarters of 2022 had negative growth. We’re still waiting for that Godot recession…



We may have negative growth again this year but recessions during the demand side part of the cycle are shallow.

We are currently dodging the DC bullet that would have mattered.

Would that be the DeLoser bullet?

When Germany sneezes, I say gesundheit. That’s the polite thing to do, and their economy is healthier than their GDP alone would indicate.