Are You Sure We’re Not Sinking into Recession Already? Or has this ship already sunk?

I still beg to differ with those who say the plunge from a positive 6.9% GDP growth rate in the last quarter of 2021 to minus 1.4% in the first quarter of 2022 is just noise. “It’s just a passing anomaly,” they say. On the contrary, I am certain the anomaly was the 6.9% reported for the end of 2021, created by everyone stocking up on everything they could get their hands on in a panic over the shortages we saw coming well before the sanctions over Putin’s invasion of Ukraine.

That big surge that made up for the lockdowns is over. It was a last hurrah for the economy. The third quarter of 2021, after all, had only seen 2.3% growth, putting the economy back at the mean for the past thirty years. 2.3% was a return to what had become the new normal since the Great Recession began.

It’s not reasonable to expect the post-pandemic-lockout blowout would last much longer than that. Clearly recovery from the most extraordinary quarantine lockdowns in history was the anomaly! It was an unexpected storm that created rogue waves throughout the global economy. In fact, 6.9% GDP growth is such an obvious outlier, in itself, that you have to go back more than two decades to find another quarter that matches up to it, excluding, of course, the one-of-a-kind anomaly that happened upon the immediate re-opening of the economy in the third quarter of 2020 after the first Covid lockdown.

So, let’s take a look at what is actually happening this quarter all around us without waiting for the next numeric GDP report. In order to understand the waters we are now sailing through, let’s gauge the sentiment of the captains of industry regarding their present circumstances, and let’s look at the way the passengers — consumers — feel about how their ship is tossing. In fact, look to your own gut-level churning as one of those passengers about the current rocking and rolling you can sense and see you if you don’t have a sinking feeling that the 1.4% drop in the economy last quarter was due to the ship you are riding in breaking up from all the storms that have already tossed it around.

Can you not hear the groaning of metal as it bends in the waves?

CEO confidence lowest since the start of the Covidcrisis

CEO confidence, as measured in a major survey sank 15 points from the first quarter. Yes, CEO’s, who should have a pretty clear sense of their own business conditions, see the present quarter as worse than the last quarter — the one where GDP took that 1.4% drop into a recessionary trough and, in fact, worse than anytime going through the pandemic. That’s pretty bad!…..more here

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