Economy shrinks, technically enters Recession

Photo by: WDAY Radio Staff
Photo by: WDAY Radio Staff

(Washington, D.C.) -- The American economy is technically in recession, shrinking an estimated nine-tenths of a percent in the second quarter of 2022.

Preliminary numbers out Thursday morning from the Commerce Department show it was the second-straight quarter of negative growth, after a one-point-six percent drop in the first three months of the year.

Analysts had predicted growth of around three-tenths of a percent. The drop was fueled in part by surging inflation and supply-chain issues.

It's the first time the economy has contracted two consecutive quarters in a row since the pandemic-induced recession of 2020.

Federal Reserve Chair Jerome Powell doesn't think the U.S. is in a recession, arguing there are "too many areas of the economy that are performing too well."  

A official declaration of recession is made by the National Bureau of Economic Research, which likely won't make a judgment for several months.