The real economic growth in the U.S. declined 0.9% in the second quarter of this year, hurling the economy into a so-called technical recession following two consecutive quarterly contractions.
- The U.S. second-quarter Gross domestic Product growth has come in at -0.9%.
- The latest data shows a second consecutive quarterly contraction, meaning the U.S. economy is technically in a recession.
- The bleak GDP numbers come after the Federal Reserve raised interest rates by another 75 basis points Wednesday.
The U.S. has reported its second consecutive quarterly decline in Gross Domestic Product growth.
U.S. GDP Shrinks 0.9%
The U.S. economy is in a technical recession.
According to the data published by the U.S. Bureau of Economic Analysis, the annualized second-quarter economic growth in the country has come in at -0.9%, falling below economists’ expectations of a 0.5% increase. The result follows an unexpectedly large 1.6% contraction of Gross Domestic Product in the first-quarter of the year.
“The decrease in real GDP reflected decreases in private inventory investment, residential fixed investment, federal government spending, state and local government spending, and nonresidential fixed investment that were partly offset by increases in exports and personal consumption expenditures (PCE),” the report read.
The U.S. economy is now technically in a recession, which outside the U.S. is commonly defined as two consecutive quarters of economic contraction. The National Bureau of Economic Research, an academic institution that determines whether the U.S. has entered a recession based on a broad range of factors, is set to evaluate the data and the state of the economy over the following week. The U.S. Secretary of the Treasury, Janet Yellen, will also hold a conference today.
The bleak U.S. GDP numbers come after the Federal Reserve hiked interest rates by another 75 basis points Wednesday. After the last increase, the U.S. interest rates are now between 2.25% and 2.5%, with the Fed allegedly planning to further hike the rates to about 3.4% by year’s end and 3.8% in 2023. The Fed’s primary mandate is to lower inflation to its intended 2% target, a long way down from the current fuming inflation rate of 9.1%. However, the central bank’s effort to bring inflation down from its four-decade high may come at a cost to consumer spending, employment, and ultimately economic growth.
Market participants may interpret the latest U.S. GDP numbers as either bullish or bearish, depending on whether they believe the data has been priced in. While negative growth is certainly not a favorable economic climate for risk-on assets, it may cause the Fed to switch to a more easing monetary policy sooner than anticipated. As markets are generally forward-looking, they may begin pricing this event months ahead, despite the present dire economic conditions.
Disclosure: At the time of writing, the author of this article owned ETH and several other cryptocurrencies.
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
Bitcoin and Ethereum Clones Jump on Market Bounce
Cryptocurrencies surged across the board Thursday, with the total crypto market gaining 7.1% on the day. Old forked coins of the industry’s most established networks are leading the way. Bitcoin…
Bitcoin Up as Fed Announces 0.75 Point Rate Hike
U.S. interest rates have returned to pre-pandemic levels as the Federal Reserve attempts to tackle soaring inflation rates. Fed Fights Inflation With 0.75% Rate Hike The Federal Reserve has hiked…
Crypto Market Dips Below $1T as Recession Fears Loom
Coinbase and MicroStrategy stocks have also taken a battering today as crypto and global financial markets await the next Federal Reserve meeting and upcoming Q2 GDP print. Crypto Market Slides…