The U.S. economy contracted in 2022’s 2nd quarter, the second consecutive quarterly downturn as the nation grapples with soaring inflation and rising interest rates. The nation’s gross domestic product (GDP) contracted at an annual rate of 0.9% in the April through June 2022 time frame, according to the advanced estimate for real GDP recently released by the Bureau of Economic Analysis. That recent contraction is a big difference from the 6.9% growth seen in 4th quarter 2021 but is a considerable improvement over the 1.6% contraction from 1st quarter 2022. The recent decline in real GDP reflected decreases in private inventory investment, residential and nonresidential fixed investment and government spending. Yet, the economy still thrives in other respects: consumer spending is up, open jobs remain plentiful and incomes keep rising. The last downturn prior to this year was in 2nd quarter 2020 when the economic fallout from the pandemic caused the U.S. economy to contract as much as 31.2%. Prior to that, the economy contracted in 2008 and 2009 during the Great Recession, with an annual decline of nearly 9% at the worst point. While two back-to-back quarters of falling GDP is considered one informal indicator of a recession, it is not an official determination. Aforementioned bright spots in the economic landscape give hope that any sort of slowdown would be short lived. Revisions for these recent figures will be updated by the Bureau of Economic Analysis in the months ahead.
