The U.S. economy contracted in the second quarter of 2022 as the economy was battered by four-decade high inflation, record high fuel prices, soaring food costs, and tighter monetary policy.
The government reported Thursday that Gross Domestic Product shrank by 0.9 percent in the April through June period. Economists had expected the economy to grow by 0.3 percent, according to the Wall Street Journal.
The economy contracted by 1.6 percent in the first quarter. Many Americans consider two straight quarters of recession to be the marker of a recession. Economists, however, rely on the determination of the National Bureau of Economic Research (NBER) to say when a recession starts. The NBER has a more complex and subjective definition of recessions and typically does not declare a recession until several months after it has begun.
The decrease in GDP reflected decreases in private inventory investment, residential fixed investment, federal government spending, state and local government spending, and nonresidential fixed investment. These were partly offset by increases in exports and household spending.