The U.S. economy contracted in the last quarter for the second consecutive time meeting the criteria for “technical recession” as the country continues to grapple with raging inflation and higher interest rates.
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.
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%.
Refinitiv economists had expected the report to show the economy had expanded by 0.5%.
Earlier this week, The U.S President Joe Biden told reporters: “We’re not gonna be in a recession in my view.”
The GDP report comes amid soaring prices across the U.S as it battles its highest inflation rate 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.
“Policymakers will no doubt be tying themselves in knots trying to explain why the U.S. economy is not in recession,” said Seema Shah, chief global strategist at Principal Global Investors. “However, they make a strong point. While two consecutive quarters of negative growth is technically a recession, other timelier economic data are not consistent with recession.”
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.
