Wednesday, 24 April, 2024

Two Quarters of Negative Economic Growth, is the US in a Recession?


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There are plenty of signs pointing to a slowing economy, but a steady job loss and rising unemployment are the clearest signs of a recession, which we are not seeing either. The unemployment rate is the most visible recession warning, but in the past, a rising rate has also meant a weak economy. So, the question remains: is the US now in a recession? And what are the signs that the country is in recession?

NPR reports “The U.S. economy shrank in the last three months by 0.9%.

This is the second consecutive quarter where the economy has contracted. In the first quarter, GDP, or gross domestic product, decreased at an annual rate of 1.6%.”

According to the National Bureau of Economic Research, a recession is an extended period of negative growth, lasting at least two quarters. The official definition of a recession is more complicated than that, as it requires several months before the economy can be declared in a recession. The most widely accepted definition is two consecutive quarters of negative GDP. Despite this, the National Bureau of Economic Research usually waits several months before making a determination.  Because of the positive employment numbers and how small the decline in the last quarter, it will likely take even longer for a recession to be declared.

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