And there it is: the economy contracted again in the second quarter, by -0.9%, nearly twice the shrink expected by “the consensus”. Recession confirmed.
They tried their darndest, with “adjustments” from the July 19 Atlanta Fed forecast of -1.6%; but there is only so much lipstick that can put on a pig.
Q1 was first printed at -1.1% and later (quietly) revised to -1.6% and is more likely than not this will happen again as investment analysts digest and tear into the gory details of the adjustments; time will tell.
There is an old maxim that a recession is a depression if you lost your job or your business or can’t make rent, and GDP is the aggregation of billions of individual exchange contributions with winners and losers both numbered in tens of millions – your mileage will certainly vary.
Nothing will change until someone changes it and it not clear who that someone might be since the folks who could change it simply deny the recession is real – this year’s Big Lie.
An increase in interest rates depresses growth and the Fed just increased them 75 basis points with another 50 expected in September.
And it appears that Manchin and Schumer have struck a trillion dollar spending deal cynically called the Inflation Reduction Act after weeks of tense negotiations over what to call it.
And so it goes…
Meanwhile, inflation in June reached 9.1 percent, thanks in large part to gas prices being $2 or more per gallon more than they were before Biden’s reign of error began (graphic from the Wall Street Journal):
The most accurate unemployment number, the U6 (unemployed plus those not working as much as they want to) at the end of June was 7 percent. The Presteblog Misery Index (inflation + U6 unemployment minus economic growth) is now at 17, a ;evel that ended Gerald Ford’s political career. It should end Biden’s career, especially since it will get worse.