Still Waiting...

You have probably seen the headlines that at the national level, there have been two quarters of declining real GDP. See below:

It is often said that two consecutive negative quarters mean a recession, but as the articles under those headlines point out, in the U.S. a recession is when the private National Bureau of Economic Research (NBER) says there is one. Even use of NBER dating is a practice among economists; there is no legal authority behind the dating.

However, the data are contradictory. Labor market data - such as the series we follow for California (new weekly claims for unemployment benefits) remain at pre-pandemic levels. 

With regard to the labor market, we are starting from levels - both in California and the U.S. - in which there are reported labor shortages. So, in a slowdown, employers may "lay off" vacancies rather than real workers, thus limiting the effect of the real decline. In any case, as they say, we live in interesting times. We're still waiting for clear signs of the direction of the economy. And there are exogenous forces at play: Russia's war on Ukraine, new COVID variants, etc.

As always, the latest new claims data are at https://www.dol.gov/ui/data.pdf.