The United States Bureau of Economic Analysis reported on Thursday that for the second straight quarter, the the United States economy has hit a widely accepted benchmark for recession. However the National Bureau of Economic Research (NBER) is in charge of declaring recessions and may likely not make a judgement on the period in question for the next few months, if not longer.

Gross Domestic Product (GDP) is the broadest measure of an economy because it encompasses the total amount of goods and services that are produced in a specific period. According to the advance estimate, Gross Domestic Product (GDP) fell by 0.9% at a yearly pace for the period. This followed a 1.6 % economic decline in the first quarter which was worse than the Dow Jones estimate of a 0.3% gain.

The GDP decline stemmed from a broad group of factors notably including decreases in residential and non-residential investment, government spending and inventories. Gross domestic investment fell by 13.5% for the last quarter. Consumer spending (measured through consumption expenditures) increased by just 1% for the period as the economic inflation. Inventories which had boosted the economic GDP in 2021 subtracted 2 percentage points from the total growth percentage in 2022’s second quarter.

This second straight negative quarterly reading has met a basic view of recession despite the unusual circumstances surrounding the decline and regardless of whatever the NBER decides to do. Markets did not react much to the news and stocks are still slightly lower at the open.Most people never expected NBER to officially declare a recession but it is worth nothing that since 1948, the U.S. economy has never seen any consecutive quarterly declines in growth without being in a recession. Markets did not react much to the news and stocks are still slightly lower at the open.

The feeling on Wall Street is that the U.S. economy could hit recession this year or in 2023 but analysts are still adamant that it is not in one, right now. Many citizens however have a different perception. As reported by a Morning Consult/Politico poll earlier this month, 65% of registered voters including 78% of Republicans believe that the United States economy is already in recession.

Featured Image Source: www.ndtv.com