No Recession Yet!

No Recession Yet!

In late July, we published a post about the second quarter GDP numbers and whether they meant we had entered a recession. That marked was the second straight quarter of GDP contraction, sometimes referred to as the definition of a recession. But adding in essentially any other metric--especially employment numbers--showed a much rosier picture. While the economy wasn't perfect, the word "recession" simply did not fit.

Third quarter GDP numbers for the U.S. were released this week, showing 2.6% growth, ahead of projections of 2.3% growth. This unspectacular but extremely solid growth confirms the reality that it was wrong to apply the word "recession" to the U.S. economy. There remains too much economic strength for that word to apply.

Unfortunately, we must note that the positivity observed in this quarter does not overturn the likelihood of a recession next year. We still face a major challenge in the form of inflation and central banks' responses to it. Add in a potential winter fuel cost spike in Europe, economic weakness in China, and the global economy is not in a healthy spot. But we're not in a recession yet!

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