Washington: The US economy has shrunk again in the last three months, media reports said on Thursday.
The US Commerce Department on Thursday announced that gross domestic product (GDP) has decreased at an annual rate of 0.9 per cent in the second quarter after falling at an annual rate of 1.6 per cent in the first three months.
The Guardian reported that the growth rate stands in marked contrast to the robust 6.9 per cent annual increase in GDP recorded in the final quarter of 2021 when the economy roared back from Covid shutdowns.
Two quarters of negative GDP growth are widely regarded as a signal that the economy has gone into recession. But the National Bureau of Economic Research (NBER) is the official arbiter of when recessions begin and end. While the GDP figures will play into the NBER’s final verdict, it also looks at a wider range of economic factors, including the jobs market, and is unlikely to give its decision soon, the report said.
It added that the GDP figures have come a day after the Federal Reserve announced another three-quarter of a percentage point increase in its benchmark interest rates as it fights to tame inflation.
Following this, US President Joe Biden in a tweet said, “After historic economic growth – regaining all private sector jobs lost during the pandemic – we knew the economy would slow down as the Fed acts on inflation.”
“Our job market is strong, spending is up, and unemployment is down. We have the resilience to weather the transition,” he added.