GDP released, giving indicators for recession

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With the second quarter gross domestic product numbers being released, is the United States headed into a recession? Gross Domestic Product is defined as the value of all the goods and services made in country. However, if a country’s GDP shrinks over two quarters a recession is declared, but it’s a bit more complex than you might think. There are other factors need to be taken into consideration, including the labor market. In the U.S. our labor market is strong. ASU economist, Professor Dennis Hoffman, helped explain what is going on.

Are we headed into a recession?

We first need to understand what the GDP actually is. Hoffman puts it as, “It’s designed to be the output of final goods and service produced in any particular time period. We measure it quarterly.” As for the question of whether are in a recession, Hoffman had this to say: “It would be very surprising that the National Bureau finds that this is indeed a technical recession.”

Are we getting caught up in the word recession?

When Hoffman was asked about people getting caught up in the word “recession” this is what he had to say: “I think it depends on who you talk with… there’s a lot of cash sloshing around in banks accounts. There’s a lot penned up savings. Consumption remains strong, travel remains strong. There are a lot of healthy spots in the economy.” Hoffman continued on to say that there are people who are still struggling with where the economy is. “There is also a group of folks who are really struggling right now. Are there more of the haves than the have nots? This really depends upon the neighborhood that you go to – to ask the question.”

What do the second quarter GDP numbers look like?

According to bea’s website, here’s what they had to say: Real gross domestic product (GDP) decreased at an annual rate of 0.9 percent in the second quarter of 2022 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 1.6 percent.

If you want more information regarding the GDP, you can click here.

Professor Dennis Hoffman/ASU economist

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