GDP Grows As Does Economists’ Gloom

Good news is that economy grew at 2.6% annual rate in Q3 after Q1 & Q2 declines. Bad news is that consumer spending, economy’s main engine, cooled so that more economists now see recession looming into 2023 …

The WSJ’s reporting that “economic uncertainty is growing” is based on a sort of a domino effect in that as consumers spend less, businesses pull back their spending all the way up & down the supply chain as well. If two consecutive quarters of GDP decline has traditionally been interpreted as a “recession”, it generally has taken two consecutive quarters of GDP growth to get out of it … and, the WSJ noted, “the signs of a broad slowdown” are now the elephant in the room to watch.

Not that consumers as well as the economy aren’t showing how “resilient” they are. The US dollar, in fact, is beating up the foreign competition, thereby contributing to that positive Q3 GDP, if at EU’s expense. Still, the litany of worries include expected additional hikes in interests rates by the Federal Reserve Board, housing sales & starts plummeting, and stubbornly high inflation to continue into the foreseeable future. The WSJ’s tea leaf conclusion: “The trajectory of the economy largely depends on ow consumers fare in the coming months.” In short: Buckle up, folks.

Davd Soul