Business

New data fans concern about a U.S. recession.

Key indicators of economic production have fallen for the second consecutive quarter, raising concerns that the United States could enter a recession, or perhaps a recession has begun.

Inflation-adjusted gross domestic product fell 0.2% in the second quarter, according to the Commerce Department. This corresponds to an annual decline of 0.9%.

The 0.2% decline followed a 0.4% decline in the first three months of the year. So, by a general but informal definition, the US economy went into recession just two years after its last.

Most economists do not yet believe that the economy meets the formal definition of recession. It is based on a wide range of indicators, including income, spending and employment indicators. The GDP data itself will be revised several times in the coming months.

Still, the data released Thursday left little doubt that the recovery was losing momentum amid high inflation and rising interest rates. Business investment and construction activity increased in the first quarter and then decreased in the second quarter. Inflation-adjusted consumer spending remained positive, but slowed. After inflation adjustments, after-tax profits declined.

Aditya Barb, Senior Economist at Bank of America, said: “But the bigger point here is that the underlying trends in domestic demand are weakening. It’s clearly slowing since the first quarter.”

The slowdown itself is not necessarily bad news. The Federal Reserve is trying to cool the economy to curb inflation, and the White House is part of an unavoidable and necessary transition to a period of steady growth after a rapid recovery last year. Claimed to be.

In a statement released, President Biden said, “The Federal Reserve will reduce inflation by breaking away from last year’s historic economic growth and regaining all private sector jobs lost during the pandemic crisis. It’s no wonder the economy is slowing down because of the action. ” After the GDP report. “But even when faced with historic global challenges, we are on the right track and can make this transition stronger and safer.”

Still, forecasters in recent weeks have become increasingly concerned that the Fed’s aggressive moves will lead to a recession, including raising interest rates on Wednesday by three-quarters for the second straight month. There are hints that layoffs are on the rise and that consumers are struggling to keep up with rapidly rising prices.

Tim Quinlan, Senior Economist at Wells Fargo, said:

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