USA: The economy is in recession for the second quarter in a row

The US is in a new recession for the second consecutive quarter, unofficially signaling the beginning of a recession.

The Commerce Department said on Thursday that gross domestic product (GDP) – a broad measure of the price of goods and services – fell at an annual rate of 0.9% in the period, after falling at an annual rate of 1.6%. the first three months.

The above is undoubtedly a significant blow to the Biden administration as it prepares for a difficult midterm election period.

Analysts expected GDP to rebound to +0.3%, which was ultimately not confirmed, with the US remaining in recession.

It is worth noting that White House officials, called to comment on the above, argue that in any case many parts of the economy remain strong.

At the same time, the US central bank (Fed) yesterday announced another increase in its key interest rates by 75 basis points – between 2.25% and 2.50% – as part of its efforts to tame inflation.

“Recent spending and production indicators have slowed. However, job creation has remained strong in recent months and the unemployment rate remains low,” the Fed said in a statement released after the committee’s meeting.

This is the fourth consecutive rate hike by the Fed: +0.25% in March, +0.25% in May, +0.75% in June (the most aggressive increase since 1994) and +0.75% today.

The decision was taken unanimously by the 12 members of the monetary committee, who left open the possibility of further increases in the near future.

The US central bank, which usually raises interest rates by 25 basis points, again made an aggressive move to tame inflation that hit a new 40-year high (9.1%) in June.

Some economic analysts, however, do not hide their concern that the economic slowdown may turn out to be stronger than expected, which could weigh on the labor market or even push the world’s largest economy into recession.

SOURCE: SKAI.GR-AP

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