A Recession Is Coming—And Here’s How We Know

For many months, economic arrows have been pointing to a likely slowdown in economic growth in the U.S., possibly indicating a recession. A contracting economy appears likely with the latest U.S. GDP report showing economic growth slowed to a 1.1% annual rate in the first quarter, well below the previous quarter when the economy expanded by a steady 2.6% according to The Bureau of Economic Analysis. My economic analysis leads me to believe the U.S. economy will go into recession, possibly as soon as the third quarter of this year, but more likely slightly later.

Given that recessions are typically two or three quarters of economic contraction, I would expect the projected upcoming recession to persist into mid-2024 with lower levels of growth to follow. This is no cause for alarm, but it does signal that businesses and consumers alike are responding to the most visible culprit undermining the economy: persistent inflation.