Recession Coming in the U.S.? Watch for These Warning Signs

The U.S. gross domestic product slipped by 1.4% in the first quarter of this year.

The drop, which surprised some economists, is just one more sign that the U.S. economy is beginning to slow.

That’s not necessarily a bad thing.

The benefit of slowing economic growth should be lower inflation as demand for goods and services declines,” says Carl Ludwigson, managing director at Bel Air Investment Advisors in Los Angeles.

Economists say there are other indicators they are watching to see if a recession is coming (or has already begun) in 2022. Look for

1.High Inflation

What it looks like now: Consumer prices are up 8.3% over the past year, according to the Consumer Price Index released in May. These figures follow an 8.5% increase year over year in March that was the highest rate of increase in 40 years.

2. A Negative Yield Curve

What it looks like now: The yield curve has been flattening, and it briefly dipped into negative territory in early April.

3. Geopolitical Uncertainty

What it looks like now:  There’s widespread uncertainty around international trade. Meanwhile, sanctions on Russia could push gas prices even higher. The World Bank lowered its economic outlook for the global economy from 4.1% to 3.2% for the year.

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