GDP has declined for two consecutive quarters, and the US economy has lost momentum TechNews Technology New Report- TechNews Technology New Report

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By Manilal

The pace of the US economy has faded as GDP declines for the second consecutive quarter

Rising prices have squeezed consumer spending, central bank interest rate hikes have stifled business investment and housing, economic headwinds have flared up, and recession fears have intensified. Gross Domestic Product annual decrease in first quarter 1.6% After that, the newly announced second quarter also declined compared to last year 0.9%.Economists say that in the face of 40 With the sharpest inflation in years, rapidly rising borrowing costs, and a general tightening of financial conditions, the U.S. The economy is rapidly losing momentum.

america season 2 GDP decreased by 0.9% per year,monthly decrease 0.2%Stalled for two consecutive quarters, the U.S. due to 70% of Gross Domestic Product From consumer spending, consumer trends have attracted a lot of attention. According to the data, service spending increased year-on-year in the second quarter. 4.1%but spending on goods fell 4.4%Inflation-adjusted final sales to home buyers, a key measure of fundamental demand, also fell in the second quarter. 0.3%compared to growth in the previous quarter 2%It shows that inflation is eroding the purchasing power of Americans.

The report also showed declines in business investment, government spending and housing. Among them residential investment 14% The rate drop, the biggest since the start of the pandemic, reflects how higher borrowing costs and rapid inflation are weighing on the housing market, with builders pessimistic about future demand and falling home sales. is. Also inventory is Gross Domestic Product The trade deficit is also reducing due to the pressure.

US retailers Walmart and Target slashed their profit estimates, including Shopify Technology companies including Apple have announced layoff plans in recent weeks, and Apple and Microsoft have also announced hiring slowdowns. However, there are bright spots in the economy, wages continue to rise, people continue to eat at restaurants and travel, and overall income is rising.

Even consumer spending on groceries falls 11.7%Much higher than last quarter’s decline 4.2%But consumer spending on food services and housing increased 13.5%higher than in the first quarter 5.2%.shows that while the prospect of a recession is rising and eating out and restaurants are becoming more expensive, while consumers are still enjoying what they missed during the pandemic, the demand for dining tables is on the rise Continue to spend money on travel.

The US government does not consider two consecutive quarters of negative growth to be a recession, mainly because the job market is still encouraging.6 moonsteady on unemployment rate 3.6%Close to the low point before the pandemic, another rise 37.2 Ten thousand jobs, saying that now there is an unprecedented extraordinary situation. The traditional definition of a recession is a significant decline in economic activity that spreads throughout the economy and lasts for more than a few months. US Treasury Secretary Yellen also said that it is not currently an economy in recession, and the recession is the general weakness of the economy, which is no longer visible.

Recently, there has been more and more analysis on the depreciation and economic pressure of the middle class assets. Investment assets have shrunk, the debt interest rate burden has increased, and wage adjustments cannot keep up with price increases. The pain will really come. The current optimism may be that economic headwinds have not yet arrived, and Michael Bury said he would see a sharp contraction in consumption by the end of the year.

Furthermore, he believes that the US government is simply playing with words, trying to downplay the economic downturn in the United States. In fact, Americans are accumulating credit card debt to pay for the rising cost of living. On the brink of a recession, upbeat corporate earnings reports may be the ultimate joy.

(First image source: Flickr/ben17_34 CC BY 2.0)

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