GDP

2022 - 7 - 28

U.S. economy just had a 2nd quarter of negative growth. Is it in a ... (NPR)

GDP shrank for a 2nd quarter in a row. While two consecutive quarters of negative growth is often considered a recession, it's not an official definition.

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GDP fell 0.9% in the second quarter, the second straight decline and ... (CNBC)

Gross domestic product fell 0.9% at an annualized pace for the period, according to the advance estimate.

Since 1948, the economy has never seen consecutive quarterly growth declines without being in a recession. That resulted in a decline of inflation-adjusted after-tax personal income of 0.5%, while the personal saving rate was 5.2%, down from 5.6% in the first quarter. The economic slowdown has created a political headache for the White House as well. "It really was to script," Zandi said of the report. That only intensified when Russia invaded Ukraine in February and, more recently, when China enacted strict shutdown measures to battle a burst of Covid cases. The Federal Reserve over the past four months has raised benchmark borrowing rates by 2.25 percentage points. But a second straight negative GDP reading meets a long-held basic view of recession, despite the unusual circumstances of the decline and regardless of what the NBER decides. "The only encouraging thing was that inventories played such a large role. Consumer spending, as measured through personal consumption expenditures, increased just 1% for the period as inflation accelerated. Gross domestic product fell 0.9% at an annualized pace for the period, according to the advance estimate. Gross private domestic investment tumbled 13.5% for the three-month period Markets reacted little to the news, with stocks slightly lower at the open.

US GDP falls for second straight quarter, stoking recession fears (The Hill)

The U.S. economy appeared to shrink for the second consecutive quarter, according to federal data released Thursday, amid growing concern the U.S. could be ...

President Biden and White House officials have tried to convince Americans that the U.S. economy is not yet in a recession thanks to a strong job market. “Whether the economy meets the conventional or formal definition of recession is in many respects immaterial. 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,” Biden said in a Thursday statement. We invite you to join the discussion on Facebook and Twitter. But economists in the U.S. consider a broader range of data when determining if the U.S. is in recession. Instead, economists turn to the National Bureau of Economic Research (NBER), a think tank not affiliated with the government, to make that call. Consumer spending rose 1 percent over the quarter, driven largely by a 4.1 percent increase in spending on services. Gross private domestic investment — which includes sales of buildings, equipment and intellectual property — fell 13.5 percent in the second quarter after rising 5 percent during the first three months of the year. Republican lawmakers were quick to release their own declarations of recession. However, we don’t believe the economy is in a recession,” he continued. Put simply, the U.S. economy would shrink by nearly 1 percent if the second quarter’s pace of growth lasted for an entire year. The unemployment rate in June was 3.6 percent, just 0.1 percentage point higher than before the pandemic began, and there were roughly two open jobs for every unemployed American since May.

Q2 GDP Advance Estimate: Real GDP at -0.9%, Worse Than Forecast (advisorperspectives.com)

The Advance Estimate for Q2 GDP, to one decimal, came in at -0.9% (-0.93% to two decimal places), an increase from -1.6% (-1.57% to two decimal places) for ...

A particularly telling representation of slowing growth in the US economy is the year-over-year rate of change. Prior to 1947, GDP was an annual calculation. To be more precise, the chart shows is the annualized percentage change from the preceding quarter in Real (inflation-adjusted) Gross Domestic Product. We've also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.17% average (arithmetic mean) and the 10-year moving average, currently at 2.23%. Real gross domestic product (GDP) decreased at an annual rate of 0.9 percent in the second quarter of 2022 (table 1), according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 1.6 percent. The GDP estimate released today is based on source data that are incomplete or subject to further revision by the source agency (refer to "Source Data for the Advance Estimate" on page 3). The "second" estimate for the second quarter, based on more complete data, will be released on August 25, 2022. The Advance Estimate for Q2 GDP, to one decimal, came in at -0.9% (-0.93% to two decimal places), an increase from -1.6% (-1.57% to two decimal places) for the Q1 Third Estimate. Investing.com had a consensus of 0.5%.

GDP Flashes Recession Warning Sign: Economy Shrank 0.9% Last ... (Forbes)

The U.S. economy unexpectedly shrank for a second quarter in a row this year, according to data released Wednesday, signaling the start of a technical ...

Though economist projections continued to call for a return to growth in the second quarter, the Federal Reserve Bank of Atlanta’s GDPNow model late last month began signaling the start of a technical recession, pushing its GDP forecast into negative territory after economic data showed consumer spending dropped in May. “The model’s long-run track record is excellent,” say DataTrek analysts Nicholas Colas and Jessica Rabe, pointing out its average error has been just 0.3 points since the Atlanta Fed started running it in 2011. The Fed’s withdrawal of pandemic stimulus measures and interest rate hikes this year have fueled concerns of impending recession. Earlier this month, Bank of America economists warned clients that prolonged inflation and the resulting interest rate hikes have unleashed a “worrying deterioration” in the economy, and particularly in the once-booming housing market. “We expect the loud wailing of an actual recession to begin early next year,” he adds. A third and final figure will then be released in September. The U.S. economy unexpectedly shrank for a second quarter in a row this year, according to data released Wednesday, signaling the start of a technical recession even as economists predict signs of a slowdown will only grow in the coming quarters, likely prompting the government to officially declare the economy has entered a recession.

Economy shrank 0.9%, marking second straight contraction and ... (USA TODAY)

The economy shrank 0.9% in Q2, marking second straight contraction, raising recession concerns. Inflation, Fed rate hikes set to slow growth.

In other words, consumers and business spending – the economy's engine – is losing some steam. Despite the budget squeeze, households continue to be bolstered by strong job growth and more than $2 trillion in savings amassed during the pandemic. Yet there’s little doubt the economy is shifting into a lower gear and entering a perilous period. Companies bulked up their stocks excessively last year to grapple with longstanding supply chain bottlenecks and product shortages. Economists surveyed by Bloomberg had forecast a 0.5% rise in GDP. By comparison, outlays surged at a double-digit pace in early 2021 when the economy was reopening and federal stimulus checks juiced purchases. The chief culprit in the second quarter contraction was a sharp pullback in business stockpiling. Inflation hit a 40-year high of 9.1% in June and the Federal Reserve is trying to combat the price surge by aggressively raising interest rates in a campaign that could trigger a recession. In the second quarter, inflation-adjusted domestic final sales, which strips out volatile categories such as inventories and trade, fell 0.3% following a 2% rise the first three months of the year. The second straight quarterly decline in output meets an informal threshold for recession but not the criteria relied on by the National Bureau of Economic Research. The non-profit group defines a recession as a significant decline in a broad range of economic activity, including employment, retail sales and industrial production. The U.S. economy has contracted for a second straight quarter, sounding the alarm over a possible recession as the nation grapples with soaring inflation and rising interest rates. The nation’s gross domestic product, the value of all goods and services produced in the U.S., shrank at a seasonally adjusted annual rate of 0.9% in the April-June period, the Commerce Department said Thursday. That followed a 1.6% drop early this year.