Most would look at these numbers and forecast a recession, however, the numbers may be misleading. Most of the decline is in inventory investment. The supply chain crisis has resulted in less inventory investment, and the war in Ukraine has some investors on the sideline. The good news is that consumer spending was strong and this is 67% of GDP. As long as consumers continue to spend, a recession can be avoided, however, interest rates may be a factor and additional increases can curb consumer spending. The jury is still out, but I wouldn't hit the panic button just yet. Another promising sign is job growth which has been strong.
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