Volatility, Not Recession

Volatility, Not Recession

Drew Matus
JUL 29, 2022

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There is likely to be a lot of noise about “technical recession” as the real economy contracted for the second quarter in a row. Q2 GDP fell by an annualized 0.9% q/q after having contracted by an annualized 1.6% in Q1.1 However, a lot of what we are seeing is an inventory story related to supply-chain disruptions. Final sales of domestic product (GDP less private inventories) were up 1.1% after contracting 1.2% in the previous quarter and real consumer spending con tinued to grow.2