Gary Willig(A7)
The US economy shrunk for the second straight corner, officially marking an economic recessions, according to figures released Thursday by the US Commerce Department.
US Gross Domestic Product, or GDP, shrunk by 0.9% in the second quarter, after shrinking by 1.6% in the first quarter. Economists had forecasted the economy would grow by 0.3% in the second quarter.
The GPD report comes one day after the Federal Reserve raised interest rates by 0.75% in an effort to curb inflation which is at a 40-year high of 9.1%.
US President Joe Biden downplayed the GDP report, saying that the fundamentals of the US economy remain strong.
“Coming off of last year’s historic economic growth – and regaining all the private sector jobs lost during the pandemic crisis – it’s no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation,” Biden said Thursday.
He added: “But even as we face historic global challenges, we are on the right path and we will come through this transition stronger and more secure.”
Biden said the US job market “remains historically strong, with unemployment at 3.6% and more than 1 million jobs created in the second quarter alone.”
