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US economy technically enters recession in spring, latest figure confirms

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Sep 30, 2022 - 03:58 AM

ANKARA (AA) – The US economy technically entered a recession in spring, contracting an annualized 0.6% in Q2, following a 1.6% drop in Q1, official data showed on Thursday.

If an economy experiences two consecutive quarters of decline in the gross domestic product (GDP), it is considered a technical recession.

The Bureau of Economic Analysis’s third GDP estimate indicated an upward revision in consumer spending that was offset by a downward revision in exports, while imports were revised down.

“The decrease in real GDP reflected decreases in private inventory investment, residential fixed investment, federal government spending, and state and local government spending, that were partly offset by increases in exports and consumer spending,” the report said.

“Current‑dollar GDP increased 8.5% at an annual rate, or $508 billion, in the second quarter to a level of $25.25 trillion.”

The Federal Reserve Chair Jerome Powell previously said the American economy deals with an “unusual set of disruptions” after the central bank made a rate hike of 75 basis points for the third consecutive time.

Meanwhile, consumer inflation showed an annual increase of 8.3% in August, above the 8.1% market estimate, while it peaked at 9.1% in June.

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