With a lot of factors at play, it remains unclear whether we are in a recession.

There is a new game show in town. It is called—Is it a Recession? This show is being played by many—market analysts, the man on the street and certainly those who are in the real estate industry. The classic definition of a recession is two negative quarters of growth in a row. We have now achieved this standard—or have we?

For one, the last quarter was only slightly negative (-0.9%) and there are revisions coming to this number. What if the quarter ends up slightly positive? On the other hand, what if this number stays negative and we add one more quarter of negative growth this year? Certainly, it is the length and the depth of the negative growth which are both important. The pandemic-induced recession of 2020 was very short, but also very deep. Of course, that recession was very unique because of the pandemic. And the growth numbers are being affected more significantly by supply shortages and inventory variances.

For a real clue to how this game show works, we need to look at the consumer. For one, we have been adding jobs all year, mainly jobs that were lost during the pandemic. The July jobs report showed an increase of over 500,000 jobs, well above expectations. And when there are more jobs, consumers are spending more. Retail sales expanded by 1.0% in June (also subject to revision) and if they expanded in July, it would be hard to call a recession in the summer of 2022. However, it is likely that the economy is slowing as the Fed tries to get inflation under control.