Alternative Visions_072222_ US Recession: Latest Indicators Show ‘Technical’ Recession Already Here

Dr. Rasmus reviews the latest data and economic indicators this past week which show a ‘technical’ recession is likely already here. ‘Technical’ refers to two consecutive quarter declines in US GDP. First quarter 2022 already declined at -1.6%. 2nd Quarter predictions by Fed show another -1.5% fall. Rasmus reviews other indicators: recent retail sales adjusted for inflation, consumer sentiment, business activity contraction in the important benchmark region of the mid-Atlantic states, and today the latest release of Purchasing Managers’ Indices for manufacturing and services, both of which now contracting, with forecasts in some regions worse to come.  Rasmus notes the recent McKinsey Consultants report on ‘The Great Attrition’, contrasted to his own ‘Great Strike’ prediction of last fall. Important union negotiations and possible strikes in railroads, west coast ports, and Teamsters next year are discussed, in relation to the anti-union 1947 Taft-Hartley Act designed to enable US government to intervene and stop strikes. Global slowdown in China and Europe and Japan now sliding into recession as well. Rasmus predicts Fed ‘demand destruction’ rapid rate hikes will ensure even non-technical definition of recession before year end 2022. But destroying demand forces contributing to inflation won’t abate supply forces also contributing. Thus recession will take down half of current inflation rate but inflation will continue into the recession period.