The GDP report on Thursday will determine the big question on every economist’s mind: Is the U.S. facing a recession or not? People have differing opinions.

Biden and Janet Yellen both downplayed recession risks early this week. They pointed to healthy employment rates as proof that the country is not yet in a recession.

• "My hope is we go from this rapid growth to a steady growth,” Biden told reporters.
• But even lawmakers can’t agree. Sen. Elizabeth Warren wrote in a Wall Street Journal op-ed on Sunday that “aggressive interest-rate hikes” implemented by the Fed could put the country on the verge of “a devastating recession.”

But there are warning signs that a recession is looming even if unemployment is low. Inflation is high, disposable income is down 12% year over year, and people are starting to default on auto loans, Dean Kim, head of equity research at William O’Neil, told me.

• On the other hand, the Conference Board recently forecast slower growth for the year, not a recession.

Tech companies were already buckling down, cutting spending, slowing hiring and laying off staff while blaming “macroeconomic conditions” as the trigger. Because of this, experts said the worst of it — at least for tech — is likely largely over.

• Sahak Manuelian, head of equity trading at Wedbush, told me that job cuts were less desperate cost-saving moves and more companies correcting “exuberant hiring” from the past year and a half, and that layoffs are loosening the once-tight labor market.
• The cuts were companies “gearing up for a down cycle in the economy to be stronger when they come out of it,” Kim said. “But in terms of the overall demand for what [tech companies] provide, I don't think that's going to go away anytime soon.”

We may not even know if we’re in a recession for a while. The National Bureau of Economic Research is the final word on business cycles. And it took it over a year to call the beginning and end of the brief 2020 pandemic downturn.

— Nat Rubio-Licht