US economy contracts again in second quarter

Friday, 29 July 2022 03:03 - - {{hitsCtrl.values.hits}}

WASHINGTON (Reuters): The US economy contracted again in the second quarter amid aggressive monetary policy tightening from the Federal Reserve to combat high inflation, which could fan financial market fears that the economy was already in recession.

Gross domestic product fell at a 0.9% annualised rate last quarter, the Commerce Department said in its advance estimate of GDP yesterday. Economists polled by Reuters had forecast GDP rebounding at a 0.5% rate.

Estimates ranged from as low as a 2.1% rate of contraction to as high as a 2.0% growth pace. The economy contracted at a 1.6% pace in the first quarter.

The second straight quarterly decline in GDP meets the standard definition of a recession.

But the National Bureau of Economic Research, the official arbiter of recessions in the US defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators”.