Ever since the 2022 first quarter of economic growth came in surprisingly as negative growth, CNBC/financial media has been in overtime trying to convince the world the country is not in a recession. A recession is defined as two quarters of negative growth in a row. So, the second quarter growth number for the economy came out last week. Everyone on CNBC doubted that the number would be negative – thus, you see, we told you – it is not a recession.
Convincing the world that we are not in a recession is good for two reasons. First, the Democrats have a better shot at reclaiming seats in November if they don’t have a recession on their record. Second, the stock market might just find the impetus to rebound, given that recession fears are out of the way.
Right before the numbers were released, CNBC’s Rick Santelli explained why the growth number will be positive. In fact, economists were predicting .3% growth in the economy. The numbers came out with a negative growth of -.9%.
According to the accepted definition of a recession – we are in one.
Steve Liesman, CNBC’s senior economist, says there is no way we are in a recession. “I don’t think that you can count that first quarter economic loss.” So, we will just disregard that number even though economists were expecting a first quarter growth of .5%, and the number was actually -.6%. What?
Then, there is the bigger fear that we are entering into stagflation. This is when you have inflation and a recession at the same time. Technically, isn’t that what we have? Then, another CNBC host says since inflation is “turning around,” we can remove the stag part of that definition. Maybe he is looking at economic numbers on Pluto. The economic numbers (which understate inflation as it is) still show strong inflationary pressures and have not let up.
Olympia Sportswear was started in 1975, became a major brand, and had 70 locations. They just abruptly announced that they were shutting down all locations and going out of business – all sales are final. They didn’t give reasons for giving up on a 47-year business. They didn’t try to go through any survival strategies. They didn’t try just to shut down a percentage of locations. They just shut down.
That kind of thing happens in recessions.