With second-quarter GDP data due out Thursday, the question of whether the economy is in recession will be on everyone’s mind.
The economy stands at least a fair a chance of hitting the rule-of-thumb recession definition of two consecutive quarters with negative GDP readings.
The last two recessions were in 2020 and 2008-2009, as annotated in the chart above.
Should inflation stay at high levels, that then will trigger the biggest recession catalyst of all, namely Federal Reserve interest rate hikes.
Treasury Secretary Janet Yellen said “we just don’t have” conditions consistent with a recession.
#economy #recession #inflation
Source: U.S. Bureau of Economic Analysis
Mentions of inflation have leveled off since March 2022, with readings of 17% or 18%, after increasing throughout the fall and winter months.
They remain relatively high compared with recent history but have been higher in the past, including 52% in October 1981, 49% in January 1982 and 31% in April 1982, around the time inflation was last at its current rate. Inflation had been named by an average of 1% of Americans between 1990 and 2021.
#inflation #economy
Source: Gallup
Despite the highest inflation in 40-years, real wages are higher than pre-pandemic as of March 2022. Real wages in March 2022, as calculated by the ratio of Avg. Hrly Earnings to CPI, is actually up 1.8% since Jan 2020!
Average Hourly Earnings are of Production and Nonsupervisory Employees, Total Private, which Paul Krugman used in his Jan 25th op-ed discussing
the inflation narrative.
Source: Ratio of Average Hourly Earnings to CPI
#economy #inflation #wages
Despite the highest inflation in 40-years, real wages are higher than pre-pandemic.
Real wages, as calculated by the ratio of Avg. Hrly Earnings to CPI is actually up 3% since Jan 2020!
Average Hourly Earnings are of Production and Nonsupervisory Employees, Total Private, which Paul Krugman used in his Jan 25th op-ed discussing the inflation narrative.
#economy #inflation #wages
A lot of people are focusing on y/y but last year was not a normal year. We should look at total CPI and wage increase since the start of the pandemic.
Since Jan 2020 CPI is up 9%
Since Jan 2020 Average Hourly Earnings are up 12.6%
#economy #inflation