Recession: US Economy Shrinks Two Consecutive Quarters
The economy of the United States has shrunk for two consecutive quarters, meeting one of the criteria for a recession, official figures released on Thursday suggest.
Breaking News: Folks We Are In Recession
2Q22 GDP -0.9%
— Charles V Payne (@cvpayne) July 28, 2022
Real gross domestic product (GDP) decreased at an annual rate of 0.9% in the second quarter of 2022, following a decline of 1.6% in the first quarter,
The drop in GDP reflects decreases in government spending, retail trade, and other sectors, the release states.
A recession is a prolonged downturn in economic activity, most often defined as two consecutive quarters of decline in a country’s GDP. It usually produces declines in economic output, consumer demand, and leads to unemployment.
“It’s no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation,” US President Joe Biden said on Thursday, commenting on the figures.
“But even as we face historic global challenges, we are on the right path,” he added.
This comes after the US Federal Reserve delivered another 75 basis-point interest-rate hike on Wednesday and suggested more may be necessary in the coming months.
“We’re not trying to have a recession – and we don’t think we have to,” said chair of the Federal Reserve Jerome Powell.
Wikipedia’s definition for “recession” has changed and the page is now locked from being edited.
— 𝐄𝐮𝐝𝐚𝐢𝐦𝐨𝐧𝐢𝐚 (@EudaimoniaEsq) July 28, 2022
Inflation in the US rose to 9.1% last month, the fastest rate since 1981, driven mainly by higher prices for fuel and food.