The U.S. economy shrank for the second straight quarter, with growth falling at a 0.9% annual rate from April through June period.
The decline that the Commerce Department reported in the gross domestic product followed a 1.6% annual drop from January through March.
The GDP report for last quarter pointed to weakness across the economy. Consumer spending slowed. Business investment fell. Inventories tumbled as businesses slowed their restocking of shelves, subtracting 2 percentage points from GDP.
Meanwhile, the Federal Reserve is moving to slow economic growth in a bid to contain sky-rocketing inflation.
However, an independent group of economists officially decide whether or not the U.S. is officially in a recession — and they haven’t called it yet.
The White House preemptively argued against the idea two quarters of non-growth would equal a recession.
“While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle,” the White House said in a July 21 statement. “It is unlikely that the decline in GDP in the first quarter of this year—even if followed by another GDP decline in the second quarter—indicates a recession,” the statement went on.
Meanwhile, Republicans criticized Democratic economic policies for financially tough times. “America is in a recession because of President Biden’s inflation crisis,” House Ways and Means Committee member Rep. Jason Smith said. “This news is not a surprise to the American people – they have spent the last 18 months living in a dysfunctional economy marked by a decline in their real wages, skyrocketing prices, empty shelves, and Help Wanted signs up and down Main Street.”
