Will the GDP Report Suggest a Recession?

The advanced report on first-quarter Gross Domestic Product (GDP) was just released.   Perhaps no other economic report this year will be more scrutinized.

Those looking for economic clues that could signal a recession will undoubtedly dissect the GDP report like a CSI team in a lab.

It’s important to remember that GDP is a lag indicator, meaning that it measures the overall economic output that’s already occurred. The advance report may demonstrate how the economy weathered the Omicron variant still gripping the country early in the first quarter. It may also give some early insight into the economic effects of the Ukraine invasion, which started in late February.

Those events may seem like old news, but they are not as far as GDP is concerned. The quarterly report is the most comprehensive study of the economy, so economists spend a great deal of time reviewing the data.

Our professionals look at both lead and lag indicators to help gauge the economy’s direction. If anything piques our attention, we will follow up with more information.

Marc Aarons may be reached at 714-887-8000 or marc@ocmoneymanagers.com

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