US Officially in Recession as GDP Shrinks 0.9% – Trustnodes

The United States economy has contracted for the second quarter in a row according to the just released data by the Bureau of Economic Analysis.

“Real gross domestic product (GDP) decreased at an annual rate of 0.9 percent in the second quarter of 2022,” the Bureau said, further adding:

“Real GDP decreased less in the second quarter than in the first quarter, decreasing 0.9 percent after decreasing 1.6 percent.

The smaller decrease reflected an upturn in exports and a smaller decrease in federal government spending that were partly offset by larger declines in private inventory investment and state and local government spending, a slowdown in personal consumption expenditures, and downturns in nonresidential fixed investment and residential fixed investment. Imports decelerated.”

This is the first time the United States has been in a recession since 2008, with this contraction being mostly due to high levels of inflation at 9.1% for June.

The economy would have to grow by more than 9% for data to show any real GDP growth, with the economy in this case growing by about 8%.

More than half of inflation is caused by a rise of both gas and oil prices to decade high levels.

The second quarter however has also seen significant layoffs in many US companies following a crash in stocks, cryptos, and other assets.

A further increase of interest rates by another 0.75% to 2.5% on Wednesday, from zero just a few months ago, has also contributed to this recession.

The question now being whether the worst is behind us as stocks and cryptos somewhat stabilize, while both oil and gas have met significant trading resistance, suggesting any further price rises are less likely.