So is it a recession or not? The US economy shrank for a second straight quarter, which to some technically means a downturn. But the obscure panel of economists actually in charge of declaring whether there is one or not says the nation isn’t there yet. Still, there’s a beleaguered stock market and larger-than-forecast rises in two key inflation gauges, which may lead the Fed to keep hiking rates aggressively. But there’s also record employment, a fist-tight labor market and consumer spending that’s still rising, albeit barely. In retail, Walmart, like competitor Target, is marking down a glut of inventory accumulated amid the supply chain chaos. And while customers are spending, they’re buying more food and necessities and less flatscreens and microwaves. “If Walmart, with its low-price prowess and cost-cutting expertise, is suffering, the damage from more skittish shoppers will be even worse elsewhere,” Andrea Felsted writes in Bloomberg Opinion.

US President Joe Biden and Chinese leader Xi Jinping ended a phone call with plans to hold their first face-to-face summit, but the US and China are unlikely to stop bickering. An immediate issue is a possible trip to Taiwan by House Speaker Nancy Pelosi. Both leaders are facing political trouble at home, in Xi’s case a revolt over a mortgage crisis that has also halved the fortune of Asia’s richest woman. Biden has been taking fire for inflation, but is slated to notch a victory, signing into law a $52 billion package to boost domestic chipmakers in the face of Chinese advances.
Big Tech is navigating the tough economic environment better than smaller rivals, earnings show. Amazon, Alphabet and Apple all met or exceeded analyst expectations, soothing investor fears even as consumers curb spending. There were notable exceptions, including Intel and Meta, which reported its first-ever quarterly sales decline. Meta was also sued by the Federal Trade Commission as the agency strikes a more aggressive antitrust approach.

Volkswagen AG risks jeopardizing the initial public offering of Porsche by having Chief Executive Officer Oliver Blume lead the whole group, according to Bernstein analysts. Blume takes over VW from ousted Herbert Diess, whose surprise firing was a reflection of challenges facing industry leaders trying to modernize for the digital age. Another victim of the transition: Plug-in hybrid electric vehicles.
Senator Joe Manchin of West Virginia surprised fellow Democrats by saying he would support a smaller version of Biden’s “Build Back Better” plan that would, if passed, be the most ambitious American effort ever to combat the climate crisis. The move comes amid a spell of extreme weather and record heat. The bill would also “provide the most important thing the US energy transition needs: momentum,” Liam Denning writes in Bloomberg Opinion.

Ever notice an expensive or antique car with Montana plates? There’s a good chance the car is just registered there, a loophole to avoid taxes and shirk emissions standards. Tighter emissions standards in states like California and Connecticut could soon make this evasive maneuver even more popular.

China’s Gen Z Is Slowing the Economy

Soaring youth unemployment in China is threatening the nation’s economy. The tech crackdown, hardline Covid-19 policies and longer-term trends in education and migration have led to a skills mismatch and a disillusioned young workforce that’s losing faith in private companies and willing to accept lower pay in the state sector.

Get Bloomberg’s Evening Briefing: If you were forwarded this newsletter, sign up here to get it every Saturday, along with Bloomberg’s Evening Briefing, our flagship daily report on the biggest global news.