A technical recession hit the US economy, new GDP data show

A slightly slower pace of contraction was reported for the US gross domestic product for the second quarter than previously reported, but the economy does remain technically in recession.

First half of 2022 saw U.S. consumer spending growth curtailed by an increase in interest rates due to 41-year high inflation.

According to the revised report released by the Bureau of Economic Analysis on Aug. 25, the U.S. GDP shrank by 0.6 percent in the second quarter, below the initial estimate of 0.9 percent.

Since the height of the pandemic in the spring of 2020, the economy had already shrunk by 1.6 percent in the first quarter.

Consumer spending was revised upward from 0.70 percent to 0.99 percent, which account for the positive changes in the revised report.

A significant increase in exports of industrial supplies, materials, travel, and food services followed an increase in consumer spending, which accounts for two-thirds of GDP.

During the second quarter, federal government spending, state and local government spending, inventory investment, and housing investment declined.

27 August 2022