The Department of Commerce announced yesterday that US gross domestic product (GDP) decreased at an annualised rate of 0.9% in the second quarter of the year, after falling at an annualised rate of 1.6% in the first three months.
The news will be a major blow for the Biden administration as it prepares for a tough midterm election season. White House officials have tried to tamp down talk of a recession, arguing that many parts of the economy remain strong.
The decline stands in marked contrast to the robust 6.9% annualised increase in GDP recorded in the final quarter of 2021, when the economy roared back from Covid shutdowns. The fast pace of growth contributed to soaring inflation – now running at 40-year highs – and the Federal Reserve’s decision to sharply increase interest rates to bring down prices.
The changing economic environment was reflected in the GDP report. Consumer spending – the largest driver of the US economy – slowed over the quarter but remained positive, rising 1% on an annualised basis.
This story is from the July 29, 2022 edition of The Guardian.
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This story is from the July 29, 2022 edition of The Guardian.
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