The United States economy contracted 0.2 percent in the second quarter of the year measured on an annualized basis, and thus chains two quarters of falls in the Gross Domestic Product (GDP), as a consequence of the global crisis derived from the war in Ukraine and runaway inflation.
This data means that the first economy in the world would be entering a technical recessionsince it is traditionally considered that an economy has entered a recession when it chains two consecutive quarters of falling GDP, a diagnosis that, however, the US Government does not share.
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In the second quarter, the GDP of the North American country had a negative variation of -0.9 percent, according to official data, with which, according to Juan David Ballén, director of Analysis and Strategy of the firm Casa de Bolsa, pointed out that The country has officially entered a recession.
The contraction is due to the highest inflation in decades, which undermined consumer spending and the Federal Reserve’s sizable interest rate hikes, which hampered business investment and housing demand.
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A) Yes, gross domestic product fell at an annualized rate of 0.9 percent after a 1.6 percent decline in the first three months of the year, the Commerce Department’s preliminary estimate showed on Thursday.
In turn, personal consumption, the largest part of the economy, increased at a rate of 1 percent, showing a slowdown compared to the previous period. The median projection in a survey conducted by Bloomberg to economists was a 0.4 percent growth in GDP and a 1.2 percent rise in consumer spending.
The commonly accepted definition of a recession is two consecutive quarters of GDP decline, but many economists, as well as the Biden administration, claim that the economy is not necessarily in a recession as it shows other, more favorable indicators.