Macro Playlist

Yes, real GDP has contracted for two consecutive quarters. On paper, that checks the box for a “technical recession.”

But in reality, we’re a long way from what we usually call a recession.
A true recession comes with broad-based deterioration: job losses, falling incomes, and a sharp pullback in production and consumption. That’s clearly not what we’re seeing.

Instead, the economy looks to be in transition.

- Defense spending has slowed sharply after a surge in late 2025
- Employment rebounded in May after a few softer months
- Household consumption is holding up
- Outlooks are improving in both manufacturing and services

In short, there’s volatility — but no real breakdown.
And the magnitude matters: the cumulative decline in GDP over the past two quarters is just 0.3%. Compare that to:

- 1.1% in 1975
- 5.3% in 1982
- 3.4% in 1991
- 4.4% in 2009

Business confidence is weak and population growth has stalled. But even so, it is far too early to call the recent period a recession.