CBO Assessment on a Current Recessionary Environment

From CBO:

The U.S. economy shows signs of slowing, but whether the economy is currently in a recession is difficult to say. It is possible that, in retrospect, it will become apparent that the economy moved into recession sometime this year. However, that is not clear from data that were available at the beginning of August. Some key metrics indicate a decline in economic activity as the first half of this year progressed, whereas others indicate continued growth, though generally at a slower rate than previously.

Real gross domestic product (that is, GDP adjusted to remove the effects of inflation) and industrial production have both declined. In particular, real GDP declined by an average of 1.25 percent (at an annual rate) in the first two quarters of 2022. Industrial production grew from January to April, was essentially unchanged in May, and then declined in June.

Other key indicators of economic activity have continued to increase in the first half of 2022, though generally at a slower rate than they had previously. For instance, real gross domestic income (GDI) increased at an annual rate of 1.8 percent in the first quarter of 2022 after growing by an average rate of 6.3 percent in the second half of 2021.2 (Second-quarter data for GDI are not yet available.) Real personal income minus transfer payments to people by federal, state, and local governments grew at an average annual rate of 0.5 percent in the first half of 2022 versus 3.1 percent in the second half of 2021. And real personal consumption expenditures grew at an average annual rate of 1.4 percent in the first half of 2022 (with somewhat slower growth in the second quarter than in the first), compared with 2.2 percent in the second half of 2021. One reason for the deceleration in personal consumption expenditures is higher inflation, which has eroded consumers’ purchasing power. Another reason is that real disposable personal income has declined in the first half of 2022. Savings accumulated during the coronavirus pandemic, including from transfer payments, have continued to support consumption.

The labor market remains tight, with low unemployment and elevated job vacancies, but both measures have softened in recent months. Net gains in nonfarm payroll employment averaged 375,000 jobs per month in the second quarter of 2022 compared with 539,000 jobs, on net, added per month in the first quarter and 590,000 jobs, on net, added per month in the second half of 2021. In June 2022, the unemployment rate was 3.6 percent (unchanged since March and near its prepandemic low) and there were about 1.8 job vacancies for every unemployed worker (one of the highest readings in the near 22-year history of this series though down from its highest level of 2.0 in March).

Graphical depiction of almost all these series is in this post.

For data through July, we have the Lewis-Mertens-Stock Weekly Economic Index:

Source: NY Fed via FRED, accessed 8/4/2022.

Tomorrow we receive unemployment rate estimates for July. In order to trigger the Sahm Rule for recession, the unemployment rate would need to jump to 5.1% (that is, the 3 month moving average unemployment rate would need to jump by 0.5 ppts above the lowest unemployment rate recorded in the last year. Bloomberg consensus is for the unemployment rate to stay constant at 3.6 ppts.

Figure 1: Unemployment rate U6 (black), Bloomberg consensus of 8/4 (black +), hypothetical rate necessary to trigger Sahm Rule (red square). NBER defined peak-to-trough recession dates shaded gray. Source: BLS via FRED, Bloomberg, NBER, author’s calculations.

69 thoughts on “CBO Assessment on a Current Recessionary Environment

  1. ltr


    August 3, 2022

    One in Three Brazilians Has Had Insufficient Food at Home in Recent Months
    17% of those interviewed by Datafolha belong to families who have sold personal items to buy food

    One in three Brazilians states that the amount of food in recent months hasn’t been enough to feed the family, according to the Datafolha survey.

    According to the survey, the percentage of voters with less than enough food at home rose from 26% in May to 33% in July. Another 12% say it was more than enough, the same percentage in both surveys. For 55%, food was enough – a decrease from 62% in May.

    The percentage of those who do not have enough food is higher among women (37%), families with an income of up to two minimum wages (46%), those who declare themselves to be black (40%), and those who live in the Northeast region (42%)….

    [ A country of about 214 million. ]

    1. ltr

      According to the survey, the percentage of “voters…”

      [ Adult citizens are required to vote in Brazil, so comprehensive polling often samples “voters.” ]

    2. ltr


      Folha de S.Paulo is a Brazilian daily newspaper founded in 1921.

      The newspaper is the centerpiece for Grupo Folha, a conglomerate that also controls UOL (Universo Online), the leading Internet portal in Brazil; polling institute Datafolha; publishing house Publifolha; book imprint Três Estrelas; printing company Plural; and, in a joint-venture with the Globo group, the business daily Valor, among other enterprises.

      Ever since 1986, Folha has had the biggest circulation among the largest Brazilian newspapers.

      1. ltr

        The Brazilian food insufficiency findings are especially important, coming from a country that should have a significant food production surplus as well as a country in which much of the energy production is hydro derived. Nonetheless, there has been significant inflation and the cost for many Brazilians is evidently already severe.

  2. ltr


    August 4, 2022

    Chinese mainland records 111 new confirmed COVID-19 cases

    The Chinese mainland recorded 111 confirmed COVID-19 cases on Wednesday, with 53 attributed to local transmissions and 58 from overseas, data from the National Health Commission showed on Thursday.

    A total of 335 asymptomatic cases were also recorded on Wednesday, and 5,903 asymptomatic patients remain under medical observation.

    The cumulative number of confirmed cases on the Chinese mainland is 229,913, with the death toll from COVID-19 standing at 5,226.

    Chinese mainland new locally transmitted cases


    Chinese mainland new imported cases


    Chinese mainland new asymptomatic cases


  3. baffling

    ltr, you led this post off with 6 consecutive posts with absolutely nothing to do with what prof. chinn has posted. STOP. you are polluting this blog with propaganda.

        1. Moses Herzog

          I wonder what ltr thinks about an elderly white lady visiting an independent nation roughly the size of Belgium?? I bet Xi Jinping almost got the citizens to forget about economic slowdowns and stability threatening debt levels for property companies. Well played Mr. Xi. And threats against America about what action you’re going to take related to an old lady’s travel schedule when all you ever do is WORK AT collaborating with murderers like Putin, is really “scary”. I guess China can sell stuff to Putin and see what that does for your export prices Mr. Xi. I don’t think you want to threaten Putin on loans to Russia that are never repaid though~~as entertaining as that might be to watch.

          1. AndrewG

            I haven’t been here as much as I’d like. Has ltr stayed mum about Pelosi? That’s interesting.

            Big thing to note: AFAIK Pelosi was very careful not to call Taiwan “independent” or “sovereign” or whatever. “One China” is still US policy apparently. But that just makes the hysterical overreaction all that more telling.

    1. Moses Herzog

      It really doesn’t bother me that much. But I just, this is not NYT, or CBS evening news or MSNBC or whatever. Outside of Economics die-hards what would be the average, how to say “individual” “non daily revisit” traffic count for this blog?? And then you have to figure the average educated is either my level (4 year bachelors) or just slightly above that, a decimal ending figure between a bachelors and a Master’s as the “average education of visitors”. Who in the F does “ltr” think he is “converting”?? It’s like going to a UNCF fundraising event to recruit for the KKK.

    1. Moses Herzog

      It’s self-serving in that he’s doing it for his daughter, let’s not get too carried away here.

    2. vini vee

      ANYTHING dick cheney says is a lie do you [edited-MDC] even know who that POS is his name is dirt and him and Bush are responsible for so many American deaths and injurys its sickening their names even come up [edited-MDC] pigs

  4. ltr


    August 5, 2022

    U.S. jobs report shows a gain of 528,000 in July.

    U.S. employers added 528,000 jobs in July, the Labor Department said on Friday, again outstripping expectations for a labor market that is still rebounding from the pandemic but that has come under increasing pressure from inflation as well as from escalating interest rates meant to rein in prices.

    The impressive performance indicates that a slowdown in some industries has not been enough to drag down overall hiring, and it provides new evidence that the United States has not entered a recession.

    But most forecasters expect that momentum to slow markedly later in the year, as companies cut payrolls to match lower demand.

    “At this stage, things are OK,” said James Knightley, the chief international economist at the bank ING. “Say, December or the early part of next year, that’s where we could see much softer numbers.”

    The unemployment rate was 3.5 percent, down from 3.6 percent in June.

    Last week, the government reported that the nation’s gross domestic product, the broadest measure of economic output, had contracted for the second consecutive quarter when adjusted for inflation. The data showed a sharp decline in home building, a slackening of business investment and a sluggish rise in consumer spending.

    Those trends are bound to affect the labor market overall, even if not uniformly or immediately.

    Amy Glaser, a senior vice president at the global staffing agency Adecco, said her firm was still struggling to fill hourly jobs, especially in retail and logistics. Employers may not have made those positions attractive enough, and, increasingly, may do without them.

    “I think we do have a gap in the jobs that are available and the desire to do those jobs,” Ms. Glaser said. “We know there are tens of thousands of warehouse jobs out there, but standing on your feet for 10 hours a day isn’t everyone’s cup of tea.”

    — Lydia DePillis

  5. Ivan

    More than half a million jobs added, unemployment rate of 3.5% – did I hear some silly boy whisper about a recession?

    1. pgl

      7:35 am this morning Stevie did just that. And an hour later – boom the BLS spoke! Dr. Chinn has a new post dedicated to Stevie’s little goof.

        1. pgl

          OK – sort of like when Don Luskin dismissed the Great Recession the day before the collapse of Lehman Brothers!

          1. Moses Herzog

            WSJ still giving him editorials, about a week ago. Haven’t read it yet. If time allows I might read it tonight for laughs. But I have so much better things to read I am behind on. Still something bad in my nature attracts me to fluff reading sometimes. What 5 minute read??

        2. Moses Herzog

          Just read it. Apparently he thinks M2 is the reason for the recent inflation and that if Volcker was alive today he wouldn’t have raised rates 0.75% late July like Powell did. Let’s say inflation continues past September for the sake of debate (I’m relatively neutral on that, but think it will drop by late December). How is he going to tie the inflation to M2 then?? Will be interesting to hear Luskin’s stuttering answer if that happens.

          1. pgl

            I read that Luskin lunacy. Luskin and Princeton Steve are the only two people who can say that “Quantity Theory of Money” is an advanced macroeconomic theory with a straight face.

    2. baffling

      the whisper is by an analyst who claims to have expertise in the economy. who in the world would hire a consultant who believes we are in a recession while adding half a million jobs with an unemployment rate of 3.5%? talk about ignoring the data and going with a gut feeling.

    3. Noneconomist

      CoRev hears news and sobs. Head in hands, he appeals to God for relief.
      Looking up, he asks “How could you let this happen, Lord? Jobs way up, unemployment trending down?I thought you were one of us!”
      Continuing, he raised his arms and shouted, “We need job losses, we need more firings and dismissals, more low income workers applying for food stamps. Did you not hear our pleas?”
      But, we still have inflation, he said to himself. And that means more pain for more families. There’s still hope.

      1. Macroduck

        So, when you write “Job” here, how should I pronounce it? Works either way, I guess.

    4. Ivan

      How about 600,000 job opening disappears and 528,000 new jobs created – is that the unmistaken sign of a recession?
      Just asking – because I have this feeling in my gut, and just for once it would be nice if it isn’t just shit rumbling around down there.

      1. pgl

        If Stevie understand the Beveridge curve he would not be touting a short lived modest retreat of Job Openings as a sure sign of RECESSION. But Stevie does not understand a single concept in economics. Not one at all.

  6. pgl

    BLS has good news for most of us even if our RECESSION CHEERLEADERS will be disappointed:


    Total nonfarm payroll employment rose by 528,000 in July, and the unemployment rate edged down to 3.5 percent, the U.S. Bureau of Labor Statistics reported today. Job growth was widespread, led by gains in leisure and hospitality, professional and business services, and health care. Both total nonfarm employment and the unemployment rate have returned to their February 2020 pre-pandemic levels.

    I did check the household survey and it seems the employment to population went from 59.9% to 60.0% as its measured increase in employment was a decent 179 thousand.

    Now wait for it – Princeton Steve’s tirade on how the folks at the BLS know nothing about labor markets.

  7. pgl

    Remember when the Senate just ignored Anita Hill as she noted that Clarence Thomas sexually harassed her. Fast forward to when the allegations that Brett Kavanaugh tried to rape Christine Blasey Ford:


    On Thursday, during a Senate Judiciary Committee hearing, FBI Director Christopher Wray admitted to Senator Sheldon Whitehouse (D-R.I.) that the bureau’s 2018 investigation into sexual assault allegations against then-Supreme Court nominee Brett Kavanaugh was a sham. The FBI had sent all relevant tips (the FBI’s assistant director, Jill Tyson, said there were about 4,500) to Donald Trump’s White House. From there, Trump’s team then decided whom the FBI could interview as part of its sexual misconduct investigation into Kavanaugh before he was confirmed. Basically, Trump wanted Kavanaugh confirmed, and he was easily able to make sure that no corroborating evidence surfaced that would bolster Christine Blasey Ford’s testimony that Kavanaugh attempted to rape her at a party when they were teenagers.


  8. pgl

    Federal Government Current Receipts have soared since 2020Q2:


    OK – this is nominal tax revenues and we should inflation adjust this. Now this rise is NOT because of some tax rate increase but the result of the recovering economy
    Now I get that MAGA hat liars like Bruce Hall want to convince you that Biden is off on some socialist spending spree but the truth is that real government purchases have declined.

  9. Steven Kopits

    China ‘convinced it needs to hit US with Pearl Harbor-style surprise attack’ to win war over Taiwan, expert warns

    The Coming War Over Taiwan

    Oriana Skylar Mastro, a fellow at Stanford University and a former China analyst at the Pentagon, told The Sun Online how Beijing increasingly views an invasion of the island as inseparable from a war with the US.

    So, Menzie, does Xi have to go, or not? Where’s the headline?

    1. pgl

      Given that the PRC took its little military excesses towards Japan, raising PEARL HARBOR is sort of a disgusting thing to say right now. But hey you had to get some obscene headline catching title so you can ignore the news this morning from the BLS.

    2. Moses Herzog

      Imagine Kopits quoting/linking two publications owned by Rupert Murdoch. In other news, I looked up at the sky this morning and it’s still blue.

  10. pgl

    Ted Cruz reminds me of Bruce Hall. Go onto Kudlow the Klown show and call Democrats a bunch of transgender wacko socialists?


    Check out the Twitter replies especially

    Not exactly your father’s Republican Party either. They’re a bunch of cult-following, Putin-loving, fascists. And you’ve got common sense conservative Repubs like Liz Cheney saying “I don’t recognize these people”.

  11. pgl

    Did Conservative Daily News hire liar Princeton Steve as their “chief economist”. Check out how they tried to spin the latest from BLS as bad news:


    With another strong topline unemployment report released today, President Joe Biden is already trying to hide behind the fig leaf of low nominal unemployment, but his party can’t hide the deep economic malaise overshadowing most Americans. Sadly, Democrats want to make things worse with a $740 billion tax-and-spend blowout that will kill jobs and do nothing to fight crippling inflation. The number of U.S. jobs jumped 528,000 last month, the Labor Department reported Friday, and the unemployment rate fell to 3.5% from 3.6%, matching a five-decade low. But that top line masks the drop in July of the labor force participation rate to 62.1% in July from 62.2% in June. This is still far below the 63.4% labor force participation in February 2020, which translates to millions fewer people who would otherwise be working today compared to before the COVID-19 pandemic.

    Never mind the BS about tax and spend. Yes – the labor force participation rate fell slightly but the employment to population ratio ROSE. 60% is not where it should be but we are still recovering from COVID19 which started under Trump’s watch. But I interrupted their spin

    Jobless claims rose to 260,000 for the week of July 30, almost 6,000 more than the 254,000 recorded the week prior, according to the Labor Department.

    Well yea but this was 261 thousand for the week of July 23. Princeton Steve told us this was rising each week. He clearly lied. But come – this is far below where it was a year ago. Of course this made me think of JohnH:

    “Meanwhile economic elites continue to dismiss Americans’ pain.”

    Seriously – this rag serves the interest of the economic elites. OK – this may be the dumbest thing I have read all day. But it is early and I’m sure our Usual Suspects will top this intellectual garbage.

  12. JohnH

    No mention of wages or earnings in the link provided. The economy may not be in recession but the average worker may be experiencing a recession as real wages drop. It’s very telling that analyses like these totally ignore the economic situation of average workers…

    1. pgl

      Try this old clueless one.

      August 5, 2022 at 9:31 am

      Your boy Dean Baker emailed his latest to me but he seems to have left you out. AWWWWW!

      BTW Dean got his information on wages from the BLS report. Oh wait – you are too lazy to read the details. Never mind.

      1. JohnH

        Where did Baker talk about real wages in this morning’s release. If wages are on a path that pleases the Fed, you must know that it will be bad for the average Joe…not that pal notices..

        1. pgl

          August 5, 2022 at 12:56 pm
          Where did Baker talk about real wages in this morning’s release.

          God you are DUMB. He does not write for BLS. But he did send some of an email which is what i said. Learn to read.

          1. JohnH

            Here’s today’s release by Baker…undoubtedly either identical to or similar to what Baker emailed to pgl.

            Apparently pgl is too dumb to copy and paste whatever Baker emailed him today.

            In any case inflation is currently running over 8% while wage gains are running at 5.0%. At this rate we’ll be back to Obama era real wages this year. And then it only takes another 3% drop to return to Bush era real wages.

            Meanwhile most economists obsess about GDP, and give workers’ real wage recession short shrift. But then again nobody ever accused economists of being in the pocket of labor…

          2. pgl

            “The fastest wage growth was in the lowest paying sector. Wages for hotel and restaurant workers rose at a 9.4 percent annual rate when comparing the last three months with the prior three. It seems that, contrary to most reporting, inflation has not been hitting those at the bottom hardest.”

            From JohnH’s own link. Yes Dean did say that but Johnny boy cannot read apparently. And he calls other people DUMB? Seriously?

    2. Baffling

      So now we see the recession crowd stepping back and saying of course its not a real recession, but maybe some people feel like they are in a recession. Interesting two step.

      1. pgl

        “The fastest wage growth was in the lowest paying sector. Wages for hotel and restaurant workers rose at a 9.4 percent annual rate when comparing the last three months with the prior three. It seems that, contrary to most reporting, inflation has not been hitting those at the bottom hardest.” – Dean Baker.

        JohnH gets on his soap box without checking the facts again!

    3. AndrewG

      Weren’t you just a couple months ago arguing that a high-inflation economy didn’t hurt the poor as much as the rich?

  13. pgl

    Dean Baker’s email had lots of details from the BLS report with this on wages:

    The pace of growth in the average hourly wage had been slowing, but there was a big jump reported in July. The average hourly wage grew at a 5.0 percent annual rate comparing the last three months with the prior three months. This is still below the 6.1 percent annual rate seen at the end of 2021, but considerably faster than a pace consistent with the Fed’s 2.0 percent inflation target. The fastest wage growth was in the lowest paying sector. Wages for hotel and restaurant workers rose at a 9.4 percent annual rate when comparing the last three months with the prior three. It seems that, contrary to most reporting, inflation has not been hitting those at the bottom hardest

  14. Moses herzog

    The comments related to “being short” is just a dog-whistle for Jon Stewart’s being a Jew. It shows what anyone paying attention already knew. Tucker Carlson is both a racist against Blacks, and also an anti-Semite. So all of those Israelis who yell out their support of donald trump should know that FOX “news” provides a broadcasting home and hefty salary to a man who enjoys randomly taking pot-shots at Jews. and not only Jews, but Jews who stand up for American veterans seriously and gravely wounded fighting in wars.

    I’d like to know, I’d like to ask the Israelis who think donald trump is their friend, that when democracy is killed by Republican AGs and those overseeing state elections across America, who those Jews think donald trump and Tucker Carson are coming after FIRST?!?!?!?! Which group do Israeli Jews and “conservative” Jews think donald trump and Tucker Carlson are coming after FIRST?? Let me give them a small hint. An American embassy in Jerusalem isn’t going to save them when Tucker Carlson rallies his racist army and Carlson’s old pals that were carrying torches in the night air of Charlottesville Virginia.

    1. pgl

      “He’s shrieking and disheveled and very short,” Carlson said. “Really short. Too short to date. Was he always that short?”

      I am only 5’6″ so short jokes really piss me off. Remember when Trump thought Yellen who is 5’3″ was too short to lead the FED? Turns out Milton Friedman was only 5 feet tall. And he was probably the brightest monetary economist from the far right. Tucker Carlson could not distinguish between fixed v. floating exchange rates.

      1. Ivan

        Tucker Carlson is a little too sure of himself. I can guarantee you that John Stewart would never date you Tucker – you are way to dumb.

      2. CoRev

        Bark bark, woof woof, the perpetually angry liberal says: “I am only 5’6″ so short jokes really piss me off.” Now we know what causes that ole Napoleon complex with which you live.

        1. pgl

          You really do need to take your meds as your playmates are running to their parents asking them to put you down. Woof, woof.

      1. pgl

        I sometimes wonder if Tucker is actually gay. But hey – he has that right as no woman would date this loser.

        1. Moses Herzog

          Rumors have swirled around former TX governor Perry for years. I have seen nothing to make me believe otherwise, including his marriage.

          Marriage is a pragmatic subterfuge for a lot of these guys, especially the ones like Lindsey Graham that go into politics. I’ll say this much for the bastard, as much as I basically detest Lindsey Graham, he hasn’t ruined any women’s or children’s lives putting on his act (so far as I know) so he deserves credit for that much.

  15. pgl

    Princeton Steve just told us Richard Nixon was a good President? I guess this troll does not know history either:


    They also shed light on a scandal that, if it had been known at the time, would have sunk the candidacy of Republican presidential nominee, Richard Nixon. By the time of the election in November 1968, LBJ had evidence Nixon had sabotaged the Vietnam war peace talks – or, as he put it, that Nixon was guilty of treason and had “blood on his hands” The BBC’s former Washington correspondent Charles Wheeler learned of this in 1994 and conducted a series of interviews with key Johnson staff, such as defence secretary Clark Clifford, and national security adviser Walt Rostow. But by the time the tapes were declassified in 2008 all the main protagonists had died, including Wheeler. Now, for the first time, the whole story can be told. It begins in the summer of 1968. Nixon feared a breakthrough at the Paris Peace talks designed to find a negotiated settlement to the Vietnam war, and he knew this would derail his campaign. He therefore set up a clandestine back-channel involving Anna Chennault, a senior campaign adviser. At a July meeting in Nixon’s New York apartment, the South Vietnamese ambassador was told Chennault represented Nixon and spoke for the campaign. If any message needed to be passed to the South Vietnamese president, Nguyen Van Thieu, it would come via Chennault. In late October 1968 there were major concessions from Hanoi which promised to allow meaningful talks to get underway in Paris – concessions that would justify Johnson calling for a complete bombing halt of North Vietnam. This was exactly what Nixon feared.

    Chennault was despatched to the South Vietnamese embassy with a clear message: the South Vietnamese government should withdraw from the talks, refuse to deal with Johnson, and if Nixon was elected, they would get a much better deal. So on the eve of his planned announcement of a halt to the bombing, Johnson learned the South Vietnamese were pulling out. He was also told why. The FBI had bugged the ambassador’s phone and a transcripts of Anna Chennault’s calls were sent to the White House. In one conversation she tells the ambassador to “just hang on through election”. Johnson was told by Defence Secretary Clifford that the interference was illegal and threatened the chance for peace. In a series of remarkable White House recordings we can hear Johnson’s reaction to the news.

    In one call to Senator Richard Russell he says: “We have found that our friend, the Republican nominee, our California friend, has been playing on the outskirts with our enemies and our friends both, he has been doing it through rather subterranean sources. Mrs Chennault is warning the South Vietnamese not to get pulled into this Johnson move.” He orders the Nixon campaign to be placed under FBI surveillance and demands to know if Nixon is personally involved. When he became convinced it was being orchestrated by the Republican candidate, the president called Senator Everett Dirksen, the Republican leader in the Senate to get a message to Nixon. The president knew what was going on, Nixon should back off and the subterfuge amounted to treason.

    Nixon’s TREASON allowed him to become President where he dragged out this needless and deadly war for 4 more years. I wonder if Stevie even knows how many people lost their lives as a result of Nixon’s TREASON?

    1. Moses Herzog

      Why does this Chennault stuff make me think if William J Casey?? That’s odd…….. /not

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