U.S. GDP Fell Less Than Previously Thought in Second Quarter
August 25, 2022
The US economy contracted at a slightly slower rate in the second quarter than estimated, according to updated data from the US Bureau of Economic Analysis.
The nation’s gross domestic product, the broadest measure of economic activity, shrank 0.6% at an annualized rate during the months between April and June. That’s an upward revision from the initial estimate released in July, which showed a 0.9% decline.
The main driver of the topline revision was an upward revision of consumer spending, which accounts for the bulk of total economic output.
Despite the slight upward revision, the latest estimate still shows two consecutive quarters of economic contraction, which is generally considered the unofficial threshold of a recession. The official declaration of a recession will be made by economists at the National Bureau of Economic Research, who take into consideration a broad array of economic indicators beyond just GDP.
Many economists are doubtful that the US is currently in the midst of a recession, citing the strong labor market and heightened levels of consumer and business spending, production, and income. Second quarter gross domestic income, an alternative economic measure that gauges incomes earned and the costs incurred in the production of all the goods and services, rose 1.4% on an annualized basis.
Regardless of whether we are in an official recession or not, it is clear that economic growth is slowing substantially, and consumer sentiment has hovered near record lows as consumers grapple with the fastest rate of inflation in more than 40 years.