For example, inflation-adjusted consumer spending showed solid growth of 1.8% annually in the first quarter, and most predictors expect it to grow, albeit slowly, in the second quarter. Employment growth remains strong. Other measures, such as industrial production and inflation-adjusted income, have been stalled in recent months, but have not dropped significantly.
However, these indicators are negative. To assess the situation in real time, predictors usually look at other indicators that have historically been good at indicating the direction of the economy. But the pandemic made it more difficult by scrambling the typical patterns of spending and investment.
Karen Dynan, an economist at Harvard University and a former Treasury official under President Barack Obama, said: “In addition to the loss of momentum, the signal is not clean as we see this post-Covid economic restructuring.”
For example, Mr. Dynan said car sales are usually a reliable sign of a slowdown. Cars were a major purchase that consumers could postpone if they were worried about unemployment. However, supply chain disruptions have plunged car sales during pandemics, making data difficult to interpret. For example, if sales recover in the coming months, does it indicate increased consumer confidence, or is it simply increasing the availability of cars?
Still, predictors say there are some numbers that are being watched closely. The most important is the employment market. Recession, by definition, leads to unemployment and increased unemployment. And the increase in unemployment, even if it’s fairly small, is almost always a sign of a recession.
According to the report, the number of unfilled jobs has dropped slightly from a record high at the end of last year. Data from the carrier site Indeed.. The number of unemployment insurance applications, which is an indicator of layoffs, has increased slightly in recent weeks. Aneta Markovska, chief financial economist at investment bank Jeffreys, said that if this trend continues, there is a good chance of a recession.
