U.S. Economy Falls into a Technical Recession
Posted on 07/28/2022
Despite pushback from Jerome Powell of the Federal Reserve, who once said that the current U.S. inflation was transitory, and the U.S. Department of Treasury Secretary Janet Yellen, the U.S. is now officially in a technical recession. The U.S. economy shrank in the spring for the second consecutive quarter of 2022. Gross domestic product (GDP), the broadest measure of goods and services produced across the economy, shrank by 0.9% on an annualized basis in the three-month period from April 2022 through June 2022, according to the U.S. Department of Commerce. Two consecutive quarters of negative growth is technically a recession. What gives policymakers the ability to argue that the U.S. is not in a recession is that recessions also typically feature high unemployment, falling income, and slowing retail sales. However, the current economic regime of high inflation is unique as the U.S. has not been accustomed to rising interest rates so quickly in recent memory.
