RECESSION: Economy Shrank at Annual Rate of 0.9% in Second Quarter, Biden Thinks We’re on the Right Path
Down two consecutive quarters, which means recession.
America is officially in a recession.
The GDP decreased at an annual rate of 0.9% in the second quarter.
There’s a decrease in private inventory and a cold housing market. Looks like exports helped keep it below 1%:
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). Imports, which are a subtraction in the calculation of GDP, increased (table 2).
The decrease in private inventory investment was led by a decrease in retail trade (mainly general merchandise stores as well as motor vehicle dealers). The decrease in residential fixed investment was led by a decrease in “other” structures (specifically brokers’ commissions). The decrease in federal government spending reflected a decrease in nondefense spending that was partly offset by an increase in defense spending. The decrease in nondefense spending reflected the sale of crude oil from the Strategic Petroleum Reserve, which results in a corresponding decrease in consumption expenditures. Because the oil sold by the government enters private inventories, there is no direct net effect on GDP. The decrease in state and local government spending was led by a decrease in investment in structures. The decrease in nonresidential fixed investment reflected decreases in structures and equipment that were mostly offset by an increase in intellectual property products. The increase in imports reflected an increase in services (led by travel).
The increase in exports reflected increases in both goods (led by industrial supplies and materials) and services (led by travel). The increase in PCE reflected an increase in services (led by food services and accommodations as well as health care) that was partly offset by a decrease in goods (led by food and beverages).
Real GDP decreased less in the second quarter than in the first quarter, decreasing 0.9 percent after decreasing 1.6 percent. The smaller decrease reflected an upturn in exports and a smaller decrease in federal government spending that were partly offset by larger declines in private inventory investment and state and local government spending, a slowdown in PCE, and downturns in nonresidential fixed investment and residential fixed investment. Imports decelerated.
The income data is not good either when you think about inflation:
Current-dollar personal income increased $353.8 billion in the second quarter, compared with an increase of $247.2 billion in the first quarter. The increase primarily reflected increases in compensation (led by private wages and salaries), proprietors’ income (both nonfarm and farm), personal income receipts on assets, and rental income (table 8).
Disposable personal income increased $291.4 billion, or 6.6 percent, in the second quarter, in contrast to a decrease of $58.8 billion, or 1.3 percent, in the first quarter. Real disposable personal income decreased 0.5 percent, compared with a decrease of 7.8 percent. Personal saving was $968.4 billion in the second quarter, compared with $1.02 trillion in the first quarter. The personal saving rate—personal saving as a percentage of disposable personal income—was 5.2 percent in the second quarter, compared with 5.6 percent in the first quarter.
UH OH! How can the White House spin it when the Fed chair says this. Damn.
— The Hill (@thehill) July 28, 2022
The government is making it worse by involving itself in everything. Raising taxes, spending more money, printing more money, etc.
We have low unemployment and lots of jobs. Great. People working still cannot afford anything because salaries aren’t keeping up with the rise in costs.
The Consumer Price Index (CPI) rose again in June and 9.1% in the last year. The Producer Price Index went up 1.1% in June.
As we see above, real disposable income decreased 0.5%. The June jobs report said average hourly earnings for all employees went up…10 cents.
How do I economics? People aren’t spending money the way they used to. They have to make budget cuts thanks to inflation.
Ooooooo gas is below $4 a gallon. WHOOP DEE DOO.
Stop raising taxes. The businesses pass it on to the consumer because they have to remain in business. No business means no jobs or goods.
Biden thinks we’re on the right path.
JUST IN – Biden's statement on the shrinking US economy: "We are on the right path." pic.twitter.com/ukQEN4YVBL
— Disclose.tv (@disclosetv) July 28, 2022
Oh! I found a person trying to work their way around the fact that we’re in a recession:
“We’re in a sentiment recession. I don’t think we’re in an actual recession. The growth slowdown has been driven by inflation and price shocks—as they fade in the near term, that should allow growth to accelerate,” said Aneta Markowska, chief financial economist at Jefferies. She expects the economy to expand 1.7% this year, measured from the fourth quarter of last year.
“Sentiment recession.” Okay, bro.
Let’s see how the media is handling the news. I see a lot of “fueling fears of a recession.” “Technical recession.”
BREAKING: The U.S. economy shrank between April and June of this year, a sign of a possible recession. https://t.co/4Z0ypD0BHK
— CBS News (@CBSNews) July 28, 2022
BREAKING: The US economy shrinks for a second quarter, raising the odds of a recession https://t.co/EPVD7zKdSG
— Bloomberg (@business) July 28, 2022
BREAKING: The U.S. economy shrank for a second straight quarter, contracting at a 0.9% annual pace and raising fears that the nation may be approaching a recession. https://t.co/dYUTWSjd80
— The Associated Press (@AP) July 28, 2022
The economy shrank at a 0.9 percent annualized rate in the second quarter, fueling fears that the U.S. is entering a recession https://t.co/0IzJKOoxe4
— The Washington Post (@washingtonpost) July 28, 2022
BREAKING: GDP fell 0.9% in the second quarter, the second straight decline and a strong recession signal https://t.co/bQT3XG1JMB
— CNBC Now (@CNBCnow) July 28, 2022
— Financial Times (@FinancialTimes) July 28, 2022
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