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Is the US already in a recession?

Matthew Luzzetti

Matthew Barnard

In this episode
Assessing the state of the US economy has become very tricky recently with various datapoints sending conflicting signals about the underlying strength. While 2.7 million new jobs were added in the first half of 2022 with the unemployment rate staying at 3.6%, consumer sentiment is plumbing historical lows and forward-looking growth indicators have weakened. Matthew Barnard, Head of Company Research, US speaks to Matthew Luzzetti, Chief US Economist, to shed light on what is going on.

Is the US already in a recession?
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What we discuss 
  • Real GDP fell 1.6% annualized in the first quarter and you are now expecting Q2 GDP to fall 0.6%. So, are we in a recession?
  • All 16 indicators from the DB Momentum Index, which has historically been a good leading indicator of US growth, are now flashing yellow or red. How should we interpret these signals?
  • How are you thinking about the path for inflation going forward as the drivers shift from supply to demand?
  • The Fed is focused on taming inflation. Do they have any choice but to keep hiking rates aggressively to slow demand, even though a recession in 2023 or sooner seems very likely?

Further reading (Deutsche Bank Research clients only)