October 1, 2022

TechNewsInsight

Technology/Tech News – Get all the latest news on Technology, Gadgets with reviews, prices, features, highlights and specificatio

GDP contracted at a revised 0.6% rate in the second quarter, indicating the United States into a technical recession

GDP contracted at a revised 0.6% rate in the second quarter, indicating the United States into a technical recession

The US economy It contracted at a slightly slower pace in the second quarter than previously reported, but continued to meet the criteria of a so-called technical stagnation as hyperinflation and rising interest rates weighed on spending.

In its second reading of the data on Thursday, the Commerce Department said gross domestic product, the broadest measure of goods and services produced across the economy, contracted 0.6% year-on-year in the second quarter. This is lower than the 0.9% decrease initially reported.

Gross domestic product actually contracted 1.6% in the January-March period, the worst performance since the spring of 2020, when the economy was mired in the recession caused by the coronavirus.

Recessions are technically defined by two consecutive quarters of negative economic growth and are characterized by high unemployment, low or negative GDP growth, low incomes and slow retail sales, according to the National Bureau of Economic Research (NBER), which tracks downturns.

Tips for navigating the recession

A recruitment sign is now displayed in front of a restaurant in Rehoboth Beach, Delaware, on March 19, 2022. (Photo by Stephanie Reynolds/AFP via Getty Images/Getty Images)

With successive declines in growth, the economy meets Technical parameters of slack, which requires “a significant decline in economic activity that spreads throughout the economy and lasts more than a few months.” However, the NBER – the semi-official arbitrator – may not confirm this immediately because it usually waits up to a year to be contacted.

See also  The bear market brought "fear and uncertainty" to Generation Z. How do they deal.

The National Bureau of Economic Research also emphasized that it relies more on data than GDP in determining whether there was a recession, such as unemployment and consumer spending, which remained strong in the first six months of the year. It also takes into account the depth of any decline in economic activity.

“Consequently, real GDP could decline by relatively small amounts in two consecutive quarters without a report of a peak,” the nonprofit said on its website.

The commission does not meet regularly, only when the members decide it is justified.

US economy heading into recession by mid-2013, say majority of economists

The latest contraction stems from a number of factors, including declines in private inventories, residential and non-residential investment, and government spending at the federal, state and local levels. These declines have been offset by increases in net exports – the difference between what the United States exports and what it imports – as well as consumer spending, which accounts for two-thirds of GDP.

The report showed that consumers are spending much less than they did in the winter, with personal consumption expenditures climbing just 1% for the period as high inflation continues and Americans’ purchasing power is eroded.

The report will exacerbate the political crisis for President Biden, who has seen his approval rating collapse in tandem with a faltering economy, and could complicate the Fed’s policy path as it weighs how quickly to raise interest rates in order to tame inflation without crushing it. Economic growth.

Central bank policy makers raised the benchmark interest rate by 75 basis points in June and July for the first time since 1994. They indicated that another increase of this size is possible in September, depending on upcoming economic data.

See also  Rogers' network outage hit millions of Canadians, sparking outrage

Federal Reserve Chairman Jerome Powell He told reporters last month that he doesn’t think the US economy is in a recession.

Get your FOX business on the go by clicking here

“I don’t think the United States is currently in a recession, and the reason is that there are many areas of the economy that are doing very well,” Powell said. “This is the The job market is very strong. …it doesn’t make sense for the economy to be in a recession with this kind of thing happening.

This is an evolving story. . Please check back for updates