Not Yet But Maybe

Inflationary concerns in the US have shifted towards recession recently as many accept that it could be the price to pay to bring inflation down. US GDP fell for the second consecutive quarter – the latest reading showed a 0.9% annualised contraction, following a decline of 1.6% (also annualised) in the first quarter of 2022.  Technically, a recession is often defined by two consecutive quarters of negative growth. But according to the National Bureau of Economic Research, the official arbiter of recessions in the US, the country has not entered a recession yet as the labour market remains strong – wages, prices and consumer spending all continue to rise.  More worryingly but unsurprisingly given the rise in prices, personal consumption (about ⅔ of US GDP) fell for the first time since the start of the pandemic. It is hard to see things turn around quickly,...