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%.
US tips into technical recession as GDP contracts by 0.9% in Q2
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.
US GDP April review
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.