Generally speaking, economists define recession as two consecutive quarters of GDP contraction in the country’s economy. At present, the US GDP fell by 1.6% in the first quarter of this year. If the GDP to be announced in the second quarter contracts again, it means that the US economy has officially entered a recession. . However, US Treasury Secretary Yellen believes that even if the US GDP growth is negative for two consecutive quarters, it cannot be called a recession.
In the face of Yellen’s different opinions, many American economists pointed out that inflation has weakened the ability of Americans to spend, coupled with the Fed raising interest rates, which quickly pushed up borrowing costs, the US Economic Commission may fall into recession, and some economists even said bluntly. , the U.S. economy has fallen into recession and will continue for some time.
According to the latest forecast released by the Federal Reserve Bank of Atlanta in the United States, the US real gross domestic product (GDP) will fall by 1.6% in the second quarter of this year. Final data released by the U.S. Commerce Department in late June showed that U.S. real gross domestic product (GDP) fell by 1.6% in the first quarter of this year.
According to data released by the Institute for Supply Management in July, the U.S. Manufacturing Purchasing Managers Index (PMI) was 52.3 in July, down from 52.7 in June. The Services Purchasing Managers’ Index (PMI) fell to 47.0 from 52.7 in June, the lowest level since May 2020. The preliminary composite purchasing managers’ index recorded a 26-month low of 47.5. Typically, a PMI below 50 means the sector is in contraction.
Jack Rasmus, professor of economics at St. Mary’s College.
Jack Rasmus, a professor of economics at St. Mary’s College in the United States, pointed out that a series of indexes released by the United States last week reminded people that investment is slowing down rapidly, and although consumption has risen, consumption generated by high inflation cannot be counted real rise.
Rasmus emphasized that the United States is rapidly heading for a recession, believes that the employment rate index is still lagging, and believes that it will be in a clear recession by September this year, and those economists who say that the United States has no major layoffs and recessions will admit that the US economy is in recession.
Former White House economist Arthur Laffer said more bluntly, “Why do some people still predict that there is a 50% chance that (the United States) will fall into a recession? The recession has obviously happened. The US GDP fell in the first quarter, and the second quarter It could also be down. We’re in a recession, and it’s going to be a recession for a while.”