The U.S. economy falls again in the second quarter, at an annual rate of 0.9%. This has made economists raise concerns about the country’s growth, and they therefore predict, maybe it is heading into recession soon.
The new figures, released Thursday by the Bureau of Economic Analysis, come at an unrestrained time for the economy. However, economists disagree on the probability of a full-fledged collapse. The past six months of contraction have normally indicated a recession. The official determination is given by a separate panel of experts. The report reflected the changing economic environment of the U.S.
The second quarter slowdown actually reflected shifting consumer and business behaviours. Retailers bought fewer items, including cars, as consumers turned their spending away from goods to services such as restaurants and hotels.
The commerce department announced Thursday that gross domestic product (GDP) decreased at an annual rate of 0.9% in the second quarter. It is the broad measure of the price of goods and services. It also fell yearly at 1.6% in the first three months.
The bad news that US economy falls, will significantly blow down the Biden administration, as it prepares for a tough midterm election season. White House officials, however, have tried to compress down the talk of a recession, arguing that various parts of the economy remain strong.
Two-quarters of negative GDP growth is widely regarded as a signal that the economy has gone into recession. The National Bureau of Economic Research (NBER), the official arbiter of when recessions begin and end, is yet to confirm it.
While the GDP figures will play into the NBER’s final verdict, it also looks at a broader range of economic aspects, including the jobs market. It is unlikely to give its decision soon.
“The 0.9% annualized fall in GDP in the second quarter is disappointing but doesn’t mean the economy is in recession,” said Andrew Hunter, senior U.S. economist