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News > U.S.

US GDP in Q2 Revised up to 0.6 Pct Contraction

  • Customers shop at a supermarket in Oregon, the United States, July 13, 2022.

    Customers shop at a supermarket in Oregon, the United States, July 13, 2022. | Photo: Xinhua/Wang Ying

Published 25 August 2022
Opinion

Economists noted that second-quarter weakness still reflects "a genuine slowing" in economic activity, and "we forecast the economy will fall into a mild recession by the beginning of next year."

The U.S. economy shrank at an annual rate of 0.6 percent in the second quarter of this year, up from a 0.9 percent contraction estimated a month ago, according to data released Thursday by the U.S. Commerce Department.

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The second estimate showed that the update primarily reflects upward revisions to consumer spending and private inventory investment that were partly offset by a downward revision to residential fixed investment.

The decrease in the actual gross domestic product (GDP) reflected declines in private inventory investment, residential fixed investment, federal government spending, and state and local government spending, which were partly offset by increases in exports and consumer spending. Imports, which are a subtraction in the calculation of GDP, increased.

With a first-quarter decline of 1.6 percent, a second consecutive quarter of negative growth would meet the technical definition of a recession.

Desmond Lachman, the senior fellow at the American Enterprise Institute and a former official at the International Monetary Fund (IMF), told Xinhua earlier that the official determination as to whether the country has entered a recession is made by the National Bureau of Economic Research, which they do "only after a few months delay."

"Upward revisions to underlying demand and a first read from the income side weakens the argument that the economy is currently in recession," Jay Bryson and Shannon Seery, economists at Wells Fargo Securities, wrote in an analysis.

They said that actual personal consumption expenditures (PCE) were revised higher by half a percentage point to an annualized rate of 1.5 percent.

Bryson and Seery, however, noted that second-quarter weakness still reflects "a genuine slowing" in economic activity, and "we forecast the economy will fall into a mild recession by the beginning of next year."

A National Association for Business Economics (NABE) survey released Monday showed roughly one-fifth of panelists believe the United States is already in a recession. At the same time, 47 percent expect a recession to begin by the end of 2022 or the first quarter of 2023.

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