The Federal Reserve’s gauge of economic growth is widely used to indicate that the U.S. could see a third consecutive quarter with negative growth. This would be considered a sign that there may soon be a recession.

The following update was posted on Tuesday Atlanta Fed’s GDPNow trackerIt now points to a 0.9% annualized increase for the second quarter.

The following is a 1.5% drop in the first three monthsThis indicator indicates that the economy is in a regression phase.

GDPNow tracks economic data real-time and makes predictions about the future direction of the economy. The model lowered the estimate for 1.3% growth to 0.9% due to Tuesday’s data and other recent releases.

From a 4.4% previous estimate, personal consumption expenditures saw a reduction to 3.7%.

The estimate was slightly boosted by an increase in the outlook for trade.

The U.S. trade deficit with its global partners fell to $87.1 billion in April — still a large number by historical standards but down more than $20 billion from March’s record. According to Atlanta Fed, net trade will subtract 0.13 percent from GDP during the second quarter. This is a decrease of the previous estimate that was -0.25 percentage point.

Speak about the recession has accelerated this yearSurging inflation is putting a damper in corporate profit prospects. Wall Street is still optimistic about a resilient consumer. still-strong jobs marketKeep the U.S. from falling into recession

Right now it seems that any mention of recession is only for 2023. Joseph Brusuelas is chief economist of RSM Consulting. We would like to view future shocks in the business cycle. The economy may slow but will return to 1.8% long-term trend growth, my feeling.

While it is true that two consecutive quarters of negative GDP are often seen as a sign of recession, this is not always the case.

This rule of thumb, according to the National Bureau of Economic Research which is also an official arbiter of economic recessions, holds sometimes but not always. One example is the recession of 2020Only one quarter saw negative growth. The NBER instead defines recession as “a substantial decline in economic activity spread throughout the economy that lasts longer than a few weeks.”

The majority of recessions that we have identified are caused by declining real GDP over a number of quarters, however not all. NBER says on its site. There are many reasons. We don’t only measure economic activity with real GDP. Instead, we consider several indicators. The second is the degree of decline in economic activity.

According to historical data, however, there have never been consecutive quarters of negative growth that didn’t result in a recession.

The Federal Reserve is a major cause of inflation worries. They are currently on a rate-hiking mode to try and quell the problem. runaway inflation. Last month, Chair Jerome Powell stated that he believes there is a chance for a soft landing or even a softening of policy.

It’s going to not be easy. This will depend on other events. Powell stated that it is our responsibility to utilize our tools in order to reach that goal.