The U.S President Joe Biden says it is “no surprise that the economy is slowing down” while reacting to the GDP report which shows that the U.S economy contracted for the second consecutive quarters meeting the criteria for technical recession.
Earlier this week, Biden said that the United States would not be entering a recession. “We’re not gonna be in a recession in my view,” said Biden.
The Gross Domestic Product (GDP), the broadest measure of goods and services produced across the economy, shrank by 0.9% on an annualized basis in the the second quarter from April to June, the Commerce Department said on Thursday. Refinitiv economists had expected the report to show the economy had expanded by 0.5%.
Compared to the previous quarter, U.S GDP fell by 0.2 per cent. In the first quarter, U.S GDP shrank by 1.6%.
The annual inflation rate in the US surged to 9.1% in June 2022, the highest in 40 years.
The U.S Federal Reserve on Wednesday announced it was raising its interest rates by 75 basis points to mitigate the price surge.
“Coming off of last year’s historic economic growth – and regaining all the private sector jobs lost during the pandemic crisis – it’s no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation,” Biden said in a statement Thursday.
“But even as we face historic global challenges, we are on the right path and we will come through this transition stronger and more secure.”
He said the the job market “remains historically strong, with unemployment at 3.6% and more than 1 million jobs created in the second quarter alone.”
“Consumer spending is continuing to grow,” Biden said.
“My economic plan is focused on bringing inflation down, without giving up all the economic gains we have made,” Biden said. “Congress has an historic chance to do that by passing the CHIPS and Science Act and Inflation Reduction Act without delay.”
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.