The U.S. economy shrank for the second consecutive quarter in Q2, the Bureau of Economic Analysis reported Thursday, bolstering fears that the nation is about to or has already entered a recession.
Gross domestic product (GDP) dropped by 0.9 percent on an annual basis from April through June, The New York Times and CNN write. Having followed another decline in Q1, Thursday’s report is consequently in line with the common-but-unofficial recession definition of “two consecutive quarters of negative economic growth,” per CNN.
That said, of course, there are a number of other indicators economists typically analyze and consider before declaring a recession — things like income, spending, and employment measures. GDP data “will also be revised several times in the months ahead,” the Times notes.
“We don’t think we’re in a recession just yet,” Aditya Bhave, senior economist for Bank of America, told the Times. “But the bigger point here is that the underlying trend in domestic demand is weakening. You see a clear deceleration from the first quarter.”
For the Biden administration, this news is surely unwelcome. For days now, officials have worked to get ahead of the report, even publishing a blog post assuring Americans that recessions involve more than just GDP, CNN notes.
But at the end of the day, the National Bureau of Economic Research is the one calling the recession shots, “and it is unlikely to render a verdict any time soon,” writes CNN.
On a similar note, the Federal Reserve on Wednesday again raised interest rates three-quarters of a percentage point to stave off record-high inflation.