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Economic Commentary

A second consecutive drop in real GDP — recession or not?

August 01, 2022
illustration of graph depicting market volatility

The contraction in real GDP in the second quarter was an ominous follow-up to a somewhat larger decline in the first quarter. But while those GDP downturns fit the rule of thumb for defining a recession, the underlying data do not. Still, recession risks continue to rise as core growth slows and the Fed continues to tighten monetary policy. Other important economic news included the Fed raising the fed funds rate another 75 basis points as it aims to regain price stability along with new and pending existing home sales falling to their lowest levels since April 2020.

What we learned last week: (pg. 1)

  • Real GDP fell for a second consecutive quarter
  • Downward slide resumes for new home sales

What we’re watching this week: (pg. 2)

  • Manufacturing activity decelerates further while new orders fall
  • Job openings remain plentiful, but edging lower

Solid, but slower, employment gains continue

View this week's economic review & outlook