7/28/22 - Economy Shrunk During Second Quarter

The White House says we are not in a recession.

(WXMI FOX-17) - The US economy shrunk .9% from April through June, according to federal projections released Thursday, marking the second consecutive quarter the US economy failed to grow.

By many definitions, if the projections released by the federal government hold true, the US could be starting a recession. Many economists consider two consecutive quarters where the economy does not grow as a recession.

The White House in a statement ahead of the release of Thursday’s figures pushed back on talks of a recession.

“While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle,” the White House said. “Instead, both official determinations of recessions and economists’ assessment of economic activity are based on a holistic look at the data—including the labor market, consumer and business spending, industrial production, and incomes. Based on these data, it is unlikely that the decline in GDP in the first quarter of this year—even if followed by another GDP decline in the second quarter—indicates a recession.”

While the economy appears to be shrinking, the job market has remained strong.

The United States added 372,000 jobs in June, which held the national unemployment rate at 3.6%.