The US economy contracted 0.6% during the second quarter of the year, according to the latest gross domestic product estimates released by the Bureau of Economic Analysis on Thursday.
This matches the latest GDP estimate and shows that the economy has been in a downturn throughout the first half of the entire year as companies have re-adapted to supply chain disruptions in the era of the pandemic.
The latest scorecard on the economy may reignite the debate over whether the US is in a recession, which is generally defined as two consecutive quarters of negative growth. some Economists and policy makers have dismissed claims of a recession in early 2022, citing strong job growth, consumer spending and manufacturing.
However, the official verdict A committee of economists at the National Bureau of Economic Research, who take a range of economic indicators into account and can review the data after many years.
The third estimate of second-quarter GDP on Thursday is based on more complete data What was available last month It reflects upwardly adjusted levels of consumer spending, federal government spending, and business fixed investment. This was offset by a downward adjustment to exports and investment in housing, the office said.
Gross domestic income, an alternative economic measure of profits and costs incurred in production, was revised down by $47.4 billion to $305.7 billion.
“Annual revisions to GDP and GDP indicate weaker US economy in the first half of 2022 than initially reported,” Jos Foucher, chief economist at PNC Financial Services Group, wrote in a note released Thursday.
He pointed out that the US economy is going through a transitional phase during 2022, and the data is contradictory, pointing to strength in areas such as the labor market, production and spending.
However, recession risks remain high, Abu Omodonbey, vice president of the Palestinian National Council and chief economist, told CNN Business, citing strong federal interest rate hikes to combat historically high inflation.
“However, we will see a significant slowdown in the US economy, particularly in interest rate sensitive sectors” such as housing and business investment, he said.
The world view is even harsher: There is a 98.1% chance of a global recession, according to Probabilistic model run by Ned Davis Research, This highlights the Russian war in Ukraine and the massive hike in interest rates by central banks to bring down inflation.
The only other times the recession model has been this high have been during severe economic downturns, most recently in 2020 and during the 2008 global financial crisis.
The first estimate of third-quarter GDP is due on October 27.
CNN Business’s Matt Egan contributed to this report.
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