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Economic Commentary

The U.S. economy is not in recession today, although real GDP may decline for a second consecutive quarter

July 19, 2022
illustration of yellow man on a bar chart with clouds in background

Highlights from the Monthly Review for July 2022:

Real GDP fell in the first quarter for the first time since the end of the Covid recession. Moreover, many forecasters expect another drop in the second quarter. A widely used rule of thumb is that consecutive quarters of declining GDP herald a recession — and that has been mostly true historically. But this time really is different, with the broader set of economic indicators that truly indicate downturns in the economy still signaling growth. Most importantly, nonfarm payrolls continue to expand at a rapid pace, and there has never been a recession when the job market has been as strong as it is today.

Economic Review

  • The U.S. economy is not in recession today, although real GDP may decline for a second consecutive quarter (pg 4)

Financial Markets

  • Rising and falling recession fears sent financial markets on a wild ride (pg 5)

The Outlook

  • Low chances for a near-term recession, but after that? (pg 6)

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