GDP Can Turn Negative After Two Quarters of 3.5% Growth

Includes: DIA, SPY
by: Bespoke Investment Group

Lately, whenever the debate surrounds whether or not the U.S. economy is on the verge of a recession, one of the arguments we frequently hear against a contraction is that GDP doesn't turn negative after two consecutive quarters of growth in excess of 3.5%.

Looking at the historical record though shows that there have actually been three different periods where GDP turned negative after two consecutive quarters of 3.5%+ growth (Q3 59, Q3 73, and Q2 81). We point this out not to say that we think GDP will turn negative this quarter, but instead to point out that it would not be an unprecedented event.

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