GDP contracted at revised 0.6% rate in second quarter amid recession fears
by Zachary Halaschak, Economics Reporter |
August 25, 2022 08:31 AM
GDP fell at a 0.6% annualized rate in the second quarter, a revised estimate from the Bureau of Economic Analysis showed Thursday morning.
The updated report confirmed the second straight quarter of declining inflation-adjusted GDP — a situation commonly used to define a recession, although it was slightly better than the initial estimate. GDP tumbled at a 1.6% rate in the first quarter.
Thursday’s report is the second of three estimates of second-quarter GDP from the BEA. The preliminary estimate, released last month, was 0.3 percentage points worse.
While the coronavirus pandemic was the biggest factor in GDP growth over the past couple of years, the bigger problem facing the economy now is inflation and the Federal Reserve’s plan to tamp it down by raising interest rates.
The Fed has raised rates at a historic scale and pace and is set to conduct another massive rate hike following the meeting of the Federal Open Market Committee next month. The increases have started to crack the economy, with the housing market in fast decline alongside negative GDP growth.
Republicans have seized on the two consecutive quarters of negative GDP growth and are claiming the economy is now in the throes of a recession.
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https://www.washingtonexaminer.com/policy/economy/gdp-contracted-at-revised-0-6-rate-in-second-quarter-amid-recession-fears
