US President Joe Biden works to hose down speculation the country is on the brink of a recession after the economy unexpectedly contracts for a second quarter.
The United States economy has unexpectedly contracted in the second quarter, with consumer spending growing at its slowest pace in two years and business spending declining, raising speculation the economy is on the cusp of a recession.Job growth averaged 456,700 per month in the first half of the yearBy some definitions, a second-straight quarterly decline in gross domestic product would be considered a "technical recession".
It could deter the Federal Reserve from continuing to aggressively increase interest rates as it battles high inflation rates, which hit 9.1 per cent in June.US inflation hit 9.1 per cent in June. Increasing borrowing costs reduces spending on large purchases such as homes and cars, easing some of the pressures that fuel inflation. But lower demand also means a decline in economic activity.
Job growth averaged 456,700 per month in the first half of the year, while domestic demand continued to grow."There is without doubt an underlying slowdown in domestic demand in evidence here," Brian Coulton, chief economist at Fitch Ratings in New York, said.
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