Is the U.S. in a recession? The tools we’ve used in the past to answer that question may no longer provide the answer. Inflation remains a big problem. The GDP has also contracted for two consecutive quarters. But we also had a blockbuster July jobs report that put unemployment at levels not seen since 1969. Consumer spending is still holding strong as well. Straight Arrow News contributor Peter Zeihan has noted before that aging worldwide populations may be rendering our long-used economic tools obsolete. He says current economic conditions indicate we are entering uncharted territory.
Excerpted from Peter’s Aug. 8 “Zeihan on Geopolitics” newsletter:
The latest jobs report–published August 5–showed that the United States added over half a million new jobs in the month of July. Unemployment is at or a near a 50-year low. Both points add credence to a growing number of economists who are pushing back against the claim that the US economy is official in a recession, despite recording negative economic growth two quarters in a row (the textbook definition of a recession).Confused? You’re not the only one. The economy is contracting, albeit not by much, but consumer spending is near an all-time high. Unemployment is an all-time low. Manufacturing employment is up. The finance sector, less so. And yet inflation remains a persistent bugbear. What is clear, however, is that the old rules about how our economy works no longer apply. And finally, a small programming note: I’m spending the next month hiking and backpacking throughout the portions of the American West. We’ll pick up with more content and more regular dispatches the first week of September.
