US Economy Enters Technical Recession After Growth Declines in Second Quarter

US Economy Enters Technical Recession , After Growth Declines in Second Quarter.

Fox Business reports that the GDP tumbled by 0.9% in the spring.

That means the U.S. economy shrank for the second consecutive quarter, .

Which meets the criteria for a technical recession.

Economists didn't see this coming, as they expected the economy to expand by 0.5%.

However, the National Bureau of Economic Research (NBER) uses more than just GDP to determine a recession.

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Other factors it considers are unemployment, consumer spending and the depth of declining economic activity.

Other factors it considers are unemployment, consumer spending and the depth of declining economic activity.

Fox News reports that consumer spending was strong in the first six months of the year.

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Policymakers will no doubt be tying themselves in knots trying to explain why the U.S. economy is not in recession, Seema Shah, chief global strategist at Principal Global Investors, via Fox Business.

However, they make a strong point.

While two consecutive quarters of negative growth is technically a recession, other timelier economic data are not consistent with recession, Seema Shah, chief global strategist at Principal Global Investors, via Fox Business.

Thus, real GDP could decline by relatively small amounts in two consecutive quarters without warranting the determination that a peak had occurred, NBER, via Fox Business