It’s a holiday weekend, so we’ll keep this glum economic update short. 🩳
Essentially, it boils down to what we’ve been talking about in the Rip for a long time.
Inflation remains too high around the globe, with the Eurozone reporting a new record high of 8.6% today. 🔥
As a result, most central banks are raising rates and taking other aggressive measures to combat inflation. Norway and Sweden joined the party this week. ⬆️
Meanwhile, record-high prices and rising interest rates are causing consumer and business sentiment to push multi-year lows (or, by some measures, record lows). 👎
And manufacturing activity is softening as more and more businesses act defensively to prepare for a potential recession. 🏭
So, the question is, is it possible that we all are “manufacturing” a recession by changing our behavior in anticipation of a recession? 🤔
That seems to be a theory many people are throwing around these days.
We’ll have to wait and see, but the Atlanta Fed’s GDPNow gauge is now forecasting Q2 GDP at -2.10%. If it does come in anywhere near that forecast, then we’ll have a real recession on our hands (2 consecutive quarters of negative GDP growth). 🔻
For now, though, let’s all forget the bad vibes and enjoy our three-day weekend with too much food/drink, fireworks, and whatever else we enjoy on our days off. 🏖️
The existential crisis about the economy (and the rest of the work we skipped this week) will be waiting for us on Tuesday when we return… 📅