05/25/2023
The 2022 recession is upon us.
Here’s how we know it’s approaching, and how YOU can prepare and profit.
A recession is defined as two consecutive quarters of negative GDP growth.
Q1 2022 saw a -1.6% contraction, but how do we know Q2 will likely also be a contraction?
There are some telltale signs.
The Atlanta Fed GDPNow tool predicts a -1.5% contraction for Q2 2022, but what data does it use to make this prediction?
The Atlanta Fed GDPNow model mimics the methods used by the BEA to estimate real GDP growth.
The GDPNow forecast is constructed by aggregating statistical model forecasts of 13 subcomponents that comprise GDP.
Here are some other charts that support that the recession is here...
Small Business Optimism is the lowest EVER.
In the history of this index by the University of Michigan, respondents have never surveyed this negatively about their business outlook.
Manufacturing PMI is in a downtrend towards the recession midline.
Purchasing managers are also surveying quite poorly, signaling an economic contraction.
The 2-year 10-year Treasury Curve has inverted below a critical recession level.
Avoiding the technical jargon of why this happens - the 2-year 10-year Treasury yield curve inverting below the 30 basis point level precedes every major recession.
We’ve dropped and channeled below this level for some time now.
Growth expectations, represented by the 10Y Treasury Yield, are topping out - just like prior to every significant recession.
Unemployment is a lagging indicator that bottoms out before every major recession.
We’ve just bottomed out, at a level that has not been broken since the late 1960s.
The labor market is beginning to roll over in many headlines.
This is signaling to us that a major economic slowdown, maybe a recession, is right around the corner.
We know a major economic contraction is ahead.
So, how can YOU position yourself to not only defend yourself but also move offensively and potentially profit?
