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Market Update: 06-06-22

ECONOMY SLOWING BUT NOT SHRINKING

 

Many pundits are issuing recession warnings and saying the economy is heading for a hard landing. Amid the cacophony of voices, we think the economy is slowing just like central bankers want but not shrinking. Further, we argue that a slowing economy is very different than a shrinking one.

ECONOMY SLOWING, NOT SHRINKING

We believe the domestic economy will continue to grow this year. Other than the anomaly in Q1 GDP (gross domestic product), we think the economy has sufficient momentum to offset the inflationary pressures. “Our base case forecast includes an inflation rate that moderates as supply bottlenecks improve and we get some closure to the Russian war with Ukraine,” explained LPL Financial Chief Economist Jeffrey Roach. Figure 1 shows our most likely scenario: the economy avoids a recession as forecasted growth approaches 2.6% in 2022 with another downshift to under 2% in 2023.

Our Team

Susan Jerris

Susan
Jerris

LPL Registered Principal 
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CA Insurance License #0662706
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Anthony Roble

Anthony
Roble

LPL Registered Administrative Assistant
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CA Insurance License #0K61923
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Diana Esperon

Diana
Esperon

Administrative Assistant
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