The Bureau of Economic Analysis is scheduled to release the first guesstimate of real gross domestic product for the second quarter on Thursday, July 28^th; the second guesstimate is scheduled for Thursday, August 25^th, and the third for Thursday, September 29^th. The first guesstimate on third quarter GDP is scheduled for Thursday, October 27^th, just 12 days before the mid-term congressional elections.

The second quarter numbers will be bad. How can we tell? The White House, which certainly has the advance numbers, is trying to redefine what indicates a recession, away from the standard and simple two straight quarters of decline in GDP, to “a holistic look at the data.”

A clue: whenever anyone uses the adjective “holistic” to describe something, you know that bovine feces is about to follow.

The initial estimate of first quarter GDP was -1.4%, but by the third report, it was down to -1.6%. With the one negative quarter in the books, if the second quarter also shows economic contraction, everyone would say we’re in a recession .  .  . and the White House can’t have that!

Well, Thursday isn’t here yet, but the Federal Reserve Bank of Atlanta had its own early guesstimate:

Latest estimate: -1.6 percent — July 19, 2022

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2022 is -1.6 percent on July 19, down from -1.5 percent on July 15. After this morning’s housing starts report from the US Census Bureau, the nowcast of second-quarter real residential investment growth decreased from -8.8 percent to -10.1 percent.

The next GDPNow update is Wednesday, July 27. Please see the “Release Dates” tab below for a list of upcoming releases.

It’s only a guesstimate, but, then again, so is the ‘official’ first estimate of the Bureau of Economic Analysis! While -1.6% could be off slightly, it’s highly unlikely that it would be off enough to signal actual growth rather than economic contraction.

In other words, a recession, the dreaded “r” word the Biden Administration wants desperately to avoid.

So, they’ll redefine away from the “r” word, and hope that the credentialed media will go along with it. The trouble is that the credentialed media are no longer the only media in town, and you can bet your bottom euro that the Republicans will pound, pound, pound on that word.

It won’t even be difficult, because inflation has hit, hard. As we previously noted, inflation has been creeping inexorably up, hitting 9.1% year-over-year in June. Naturally, President Biden wanted to dispute the figures, calling them “out of date,” but nevertheless telling Americans he was going to do something about it.

In one regard, he’s right: fuel prices have declined since their maximum on June 14^th, but they are still significantly higher than they were at this time last year, and the inflation figures are based on the same month the previous year. The national average for regular gasoline was $4.467 per gallon on Wednesday, July 20^th, certainly down from $5.014 in mid June, but it was $3.16 at the end of July last year. That’s a 41.36% increase in one year, and 83.60% over the $2.433 in July of 2020. The overall 9.1% inflation number might come down a bit from June’s, but not a lot.

It was back in 2016 that I first noted Heather Long’s article on CNN Money:

The U.S. unemployment rate is only 4.9%, but 57% of Americans believe it’s a lot higher than that, according to a new survey by the John J. Heldrich Center for Workforce Development at Rutgers University.

The general public has “extremely little factual knowledge” about the job market and labor force, Rutgers found.

It’s another example of how experts on Wall Street and in Washington see the economy differently than the regular Joe. Many of the nation’s top economic experts say that America is “near full employment.” The unemployment rate has actually been at or below 5% for almost a year — millions of people have found jobs in what is the best period of hiring since the late 1990s.

But regular people appear to have their doubts about how healthy America’s employment picture is. Nearly a third of those survey by Rutgers believe unemployment is actually at 9%, or higher.

I pointed out than that while the ‘official’ U-3 unemployment rate was 4.9%, the U-6 unemployment rate for August, 2016 was 9.7%,^[1]U-6 unemployment is defined as “Total unemployed, plus all persons marginally attached to the labor force. Persons marginally attached to the labor force are those who currently are neither working … Continue reading not too far off of the ‘common people’s’ estimate that it was “9%, or higher.”

The point is simple: what the public feel is more important than what government officials say. If President Biden and his minions keep telling people that inflation is coming down, but the public keep seeing the prices of everything increase, who are they going to believe, the government, or their own eyes?

The Democrats will try to mealy-mouth the definition of recession, but when recessions come, people feel them, feel them in their bones. The price of everything is going up, and credit is tighter. Rents are increasing, and home purchase prices continue to rise. When people have to put more and more of their paychecks into the gasoline tank, that means less and less in their wallets for other things.