ASA’s April Economic Report: Is an Economic Turn Starting? What the Data Says.

From the May 2024 ASA Monthly Economic Report: US GDP fell in Q1 and missed expectations. The question now is whether that decline to 1.3% is the start of a recessionary trend or an anomaly. The latest estimate from the GDPNow data is for Q2 growth at 1.8% which is generally just slightly ahead of expectations for the quarter. The variation in these estimates comes from the fact that measuring goods activity is much more reliable than measuring service activity and the US is still an economy that is 70% service driven.

According to the latest data from GDPNow the second quarter numbers rebound from Q1 but there are also signals of a general slowdown. Very few are suggesting that a recession is back in the cards but there does appear to be a slowdown that could affect the latter part of the year. Inflation growth is down but the current inflation situation has not reversed (rates are too high and above the Fed Target rate), which is largely a result of higher wages.

The monthly ASA Economic Report is produced by Armada Corporate Intelligence, ASA’s business intelligence partner, and is available as a free member benefit for ASA members through the MyASA portal at www.asa.net/myasa.

Additionally, Armada noted that throughout 2023 there was an expectation of an imminent recession. The consensus view among economists was that growth would fall into negative territory, but it never did. At the start of this year the assumption was that this party was going to continue and then Q1 growth disappointed and came in at 1.3%. Is there reason to think that the recession expected last year might now manifest? There are indeed some concerns…

The report also answers a reader’s question of the month: Industry has been complaining about the workforce shortage for years. Any suggestions?

Again, ASA members can access the Monthly Economic Report through the MyASA portal at www.asa.net/myasa.