Last Updated on July 28, 2022 by Bitfinsider

According to the Bureau of Economic Analysis’s recently released data, the US economy shrank for the second consecutive quarter.

The Bureau said: “Real Gross Domestic Product (GDP) decreased at an annual rate of 0.9 percent in the second quarter of 2022,” and further added: “Real GDP decreased less in the second quarter than in the first quarter, decreasing 0.9 percent after decreasing 1.6 percent.”

The smaller decline was caused by an increase in exports and a smaller drop in federal government spending. These factors were partially offset by larger drops in private inventory investment, state and local government spending, a slowdown in personal consumption expenditures, and declines in residential fixed investment and nonresidential fixed investment. Imports slowed down.

The United States is currently experiencing its first recession since 2008, with June’s inflation rate of 9.1 percent being the primary cause of the contraction.

For data to indicate any real GDP growth, the economy would have to expand by more than 9 percent, with the economy in this scenario rising by roughly 8 percent.

The surge in oil and gas prices to decade-high levels is responsible for more than half of inflation.

However, the second quarter also saw a lot of substantial layoffs in US corporations as a result of a drop in stocks, cryptocurrencies, and other assets.

This recession has also been exacerbated by Wednesday’s additional hike in interest rates from zero just a few months ago to 2.5 percent.

The question today is whether the worst is over, as equities and cryptocurrencies appear to have stabilized slightly and oil and gas have encountered strong trade resistance, reducing the likelihood of additional price increases.

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Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.