The US economy contracted at an annualized rate of 0.9% in the second quarter, the US Bureau of Economic Analysis' first estimate showed on Thursday. This reading came in much worse than the market expectation for an expansion of 0.5%.
Recession – the world's largest economy has shrunk for two consecutive quarters, meeting one definition of a recession. It is not an official recession just yet – only the little-known NBER calls such events – but the initial headline is worrying. Not until we look into the details.
The annualised pace of US real GDP growth in Q1 2022 came in at negative 1.4%, according to data released by the US Bureau of Economic Analysis on Thursday. That was a big miss on expectations that the economy had grown at an annualised pace of 1.4% in Q1 and marked a significant turnaround in fortunes from Q4 2021's robust 6.9% annualised growth rate.
Is it time to use the R-word? R stands for recession, which is defined by two consecutive quarters of economic shrinking. The US economy squeezed by 1.4% in the first quarter of 2022 – so it would only take another one to have an official downturn. Not so fast – not a recession, nor the dollar.
