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The United States is Officially Entering Recession


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Biden Administration officials cannot hide the reality of the United States economy.

After GDP (gross domestic product) declined for the second consecutive quarter, the United States is officially entering a recession.

“Gross domestic product fell 0.9% at an annualized pace for the period, according to the advance estimate,” CNBC reported.

“That follows a 1.6% decline in the first quarter and was worse than the Dow Jones estimate for a gain of 0.3%.”

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The U.S. economy contracted for the second straight quarter from April to June, hitting a widely accepted rule of thumb for a recession, the Bureau of Economic Analysis reported Thursday.

Gross domestic product fell 0.9% at an annualized pace for the period, according to the advance estimate. That follows a 1.6% decline in the first quarter and was worse than the Dow Jones estimate for a gain of 0.3%.

Officially, the National Bureau of Economic Research declares recessions and expansions, and likely won’t make a judgment on the period in question for months if not longer.

But a second straight negative GDP reading meets a long-held basic view of recession, despite the unusual circumstances of the decline and regardless of what the NBER decides. GDP is the broadest measure of the economy and encompasses the total level of goods and services produced during the period.

“We’re not in recession, but it’s clear the economy’s growth is slowing,” said Mark Zandi, chief economist at Moody’s Analytics. “The economy is close to stall speed, moving forward but barely.”

Markets reacted little to the news, with stocks slightly lower at the open. Government bond yields mostly declined, with the biggest drops at the shorter-duration end of the curve.

A separate report Thursday showed that layoffs remain elevated. Initial jobless claims totaled 256,000 for the week ended July 23, a decline of 5,000 from the upwardly revised level of the previous week but higher than the Dow Jones estimate of 249,000, according to the Labor Department.



 

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