The U.S. economy showed signs of weakness, experiencing a second straight quarterly decline from April to June, dropping at an annual pace of nine-tenths of a percentage point and pushing the world’s biggest economy into a recession by one common measurement.
The Commerce Department reported the decline in the gross domestic product – the broadest gauge of the American economy – late last week.
It followed a 1.6% annual drop in the January-to-March period.
It is argued by economists in general that two consecutive quarters of negative economic growth is a recession.
However, some have posited that the U.S. economy is in a state of contradiction – with hundreds of thousands of new jobs being added each month and the unemployment rate at a nearly 50-year low of 3.6%, even as inflation in consumer prices surges at the fastest pace in four decades – it would be too simple to argue for a recession at this stage.
U.S. President Joe Biden said in a statement, “Coming off of last year’s historic economic growth – and regaining all the private sector jobs lost during the pandemic crisis – it’s no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation.”
“But even as we face historic global challenges, we are on the right path and we will come through this transition stronger and more secure,” he added. “My economic plan is focused on bringing inflation down, without giving up all the economic gains we have made.”
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Edited by Jesus Chan
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