The economy seems to be entering a recession.
The Federal Reserve Bank of Atlanta’s GDPNOW economic indicator fell further into negative territory, falling from minus 1 percent to -2.1 percent on Friday. About two weeks ago this week, the audience showed zero growth.
Readings were lowered due to data on production and construction costs. The Barometer of manufacturing activity has dropped to its lowest level since May 2020, when the economy collapsed since the start of the pandemic and lockouts, the Institute for Supply Management said on Friday. The Commerce Department’s report on construction spending showed a 0.1 percent drop, the first drop in 8 months.
The GDPNOW tracker is designed to show you what the latest data means for current economic growth. It does not attempt to forecast growth based on unpublished data. Therefore, if the incoming data is consistent with economic growth, the negative current value can be replaced by a positive value in the future.
The economy contracted 1.6 percent in the first quarter. Generally, two consecutive quarters of an economic downturn are considered recessions, but the official explanation for when recessions begin and end comes from a little-known committee of economists affiliated with a private organization called the National Bureau of Economic Research. on a more complex, subjective and less transparent analysis.
Economists are increasingly concerned about growth in the second quarter. Bank of America slashed its forecast to zero on Friday morning, ahead of the release of data that led to a decline in GDPNOW.
For example, real consumer spending rose just 1.8% in the first quarter, according to revised data released Wednesday by the Commerce Department. This is lower than the original 3.1 percent growth forecast. Economists surveyed by Econoday gave estimates of 2.9 to 3.1 percent, with an average estimate of 3.1 percent. So the ratings are not correct.
The Commerce Department’s first-quarter and May personal consumption expenditure data showed that consumer spending was virtually unchanged since January. Household incomes fell in line with inflation, and rising wages were offset by rising prices. PCE inflation, the Fed’s favorite measure of price change, stayed at 6.3% in May despite easing forecasts as the Fed implemented its largest rate hike in this century.
Source: Breitbart
