Are we already in a recession?

Russell T. Price, Chief Economist – Ameriprise Financial


Key Points

  • We may meet the historical definition of “recession” over the near-term without actually achieving the official designation.
  • Increased recession talk could further weigh on consumer and market sentiment. However, we believe consumer, business and market sentiment already reflect recessionary levels. I.e., a recession already appears priced-in.
  • Should an “official” recession yet arrive, we believe it would be relatively short and shallow.
  • Consumers remain in sound financial condition, in our view, but higher prices and a jump in borrowing costs should be expected to hinder spending.



Two quarters of negative GDP growth? Real (i.e., inflation adjusted) consumer spending declined by a weaker than expected 0.4% in May, according to yesterday’s Commerce Department report. The results for April were revised slightly lower as well.

Upon updating our Gross Domestic Product (GDP) model for this new information, we now see real U.S. GDP growth for Q2 at just +0.3%. This leaves little room for error in keeping growth for the period in positive territory.

Read the full report.