U.S. teetering on brink of recession as GDP contracts in second quarter
(Worthy News) – The U.S. economy unexpectedly contracted in the second quarter, with consumer spending growing at its slowest pace in two years and business spending declining, raising the risk that the economy was on the cusp of a recession.
While the second straight quarterly decline in gross domestic product reported by the Commerce Department on Thursday largely reflected a more moderate pace of inventory accumulation by businesses due to ongoing shortages of motor vehicles, the economic profile was weak, with exports as the only bright spot.
This could deter the Federal Reserve from continuing to aggressively increase interest rates as it battles high inflation. The U.S. central bank on Wednesday raised its policy rate by another three-quarters of a percentage point, bringing the total rate hikes since March to 225 basis points. [ Source: Reuters (Read More…) ]
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