Is the US in a recession?
No, according to the traditional definition of two negative quarters of gross domestic product.
But to a middle-class family and those less fortunate, a couple of GDP ticks up or down are utterly meaningless.
In Washington — where the learned economists who came up with the definition toil — not a single pencil-pusher saw the massive 2007-2009 financial crisis coming or the fact that the economy would not grow in the first quarter of this year.
In fact, at the Fed they forecast 2 percent growth for the quarter.
Let’s move to the kitchen table, where the real-life economic decisions get made. What bills will be paid and what purchases can be made?
This is where economic growth begins — and where barely any of the $4 trillion of the Fed’s ballooning balance sheet has reached.
Walmart reported earnings Thursday, and they are a meaningful measure of what’s going on in the consumer’s kitchen.
With its vast array of products, Walmart is America’s general store. It provides a window on not only how much consumers spend, but also what they’re spending it on every day.
So when Walmart guided down estimates for next quarter, stocks and bonds became even more fearful of growing economic weakness.
When in doubt, look to the bond market — the adult in the room — for guidance in these important matters.
The 10-year Treasury bond yield is trading at recessionary levels. The benchmark note broke below the psychologically important level of 2.5 percent, and the 30-year is at 3.33 percent.
Besides being a gauge for mortgage rates, these yields say that Treasury market traders don’t see much growth — if any — for the near future.
Speaking of kitchens, for most Americans, President Harry S. Truman’s famous quote works quite well for defining an economic slowdown: “It’s a recession when your neighbor loses his job; it’s a depression when you lose yours.”
Today everybody has a friend or family member out of work. No matter how the Beltway economists slice it or how they spin it, this zero of an economy is still at zero.