NEW YORK (July 28th)—GDP printed at -0.9 percent this morning, 1.4 percentage points worse than market expectations of +0.5 percent. We had estimated the GDP to print up between nil to 0.5 percent up in our June Jobs Report.  We attribute the “miss” to a continuing anomaly from the ports being cleared, discussed more below.
The Bureau of Economic Analysis (BEA) print met the generally accepted definition of a technical recession, which most analysts accept as two consecutive quarters of negative growth.  (The Biden White House had tried to spin the definition last week in a  frankly embarrassing—and gravely misguided—preemptive attempt to redefine recession.  Two consecutive quarters of negative growth have been treated as “recession” since at least 1947.)  The combination of recession and inflation causes us to be back to “stagflation,” a portmanteau of “stagnation” and “inflation.”  We have not seen “stagflation” since it was ushered in by the Carter Administration back in the late 1970s….