Is it a recession? It depends…
Hello from Philly! Hope everyone is doing well despite the heat, flooding, *general hand wave*, and anything else you can think of. This weeks newsletter is a bit short on the happenings of the veterinary world given I am at AVMA convention and in the process of moving…what’s a little chaos without a little more chaos. Even though it is a short week, there is still one big news items to cover, so buckle up and get ready for this one…
—Clint
General Economy Update
What do we call a week where we had 2 consecutive quarters of GDP decline, but no official recession? I call it more “econostress” (see one of the first newsletters to know that I made up this word). The idea that economic growth is slowing, along with increased interest rates, but consumer spending and jobs are still steady is all a bit confusing. So why no recession? Well this is decided by a bunch of economists that take into account all of the various numbers and indicators and then make decisions. As I discussed last week, a recession is typically indicated as two consecutive quarters of GDP decline, but that isn’t always the case. In fact, the last recession induced by COVID-19 was not indicated by two quarters of decline. But the immediate and severe decline in economic activity warranted the distinction. The FED did go ahead and raise interest rates by 75 bp, but this seems like a “stay the course” and correct later strategy given the mixed economic signals.
My opinion is that the FED will wait to determine if it is a recession until we see if all sectors begin to cool down. Just keep in mind that with this cool down, pet owners are also feeling that strain. It is worth thinking about how you can encourage people to still bring their pets in while keeping it affordable.
—CN
Share the Newsletter and subscribe!