Following a near indication after the release of Q1 preliminary GDP, preliminary GDP for the Q2 is once again flashing a warning signal that the economy is heading into a recession. As I have mentioned from time to time, one of the measures I watch is the absolute change in change in GDP on year-over-year basis with regards to the recent trend. For instance, a year-over-year trend in GDP less than or equal 1.5% and that has been declining in the near-term has heralded in weaker GDP in future quarters. Here is the latest updated chart showing this dynamic.
Year-on-year GDP is showing growth of just 1.3%, below the 1.5% threshold that marks significantly higher risks of recession. The increase of recessionary risks coincides with warning signals flashing in other measures, fore instance the ISM and dividend cuts. We will have to see if the growth in the advanced GDP estimate remains just as weak. If these estimates are any indication, the risks of a recession will remain elevated if not increase further.
Year-on-year GDP is showing growth of just 1.3%, below the 1.5% threshold that marks significantly higher risks of recession. The increase of recessionary risks coincides with warning signals flashing in other measures, fore instance the ISM and dividend cuts. We will have to see if the growth in the advanced GDP estimate remains just as weak. If these estimates are any indication, the risks of a recession will remain elevated if not increase further.
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