United States Officially Enters A Recession

The United States has entered a recession as the economy continued to shrink in the second quarter of 2022, according to a new report from the U.S. Bureau of Economic Analysis.

“Real gross domestic product (GDP) decreased at an annual rate of 0.9 percent in the second quarter of 2022, following a decrease of 1.6 percent in the first quarter,” the report said. “The smaller decrease in the second quarter primarily reflected an upturn in exports and a smaller decrease in federal government spending.”

In response to the report, Democrat President Joe Biden blamed the Federal Reserve for increasing the interest rate to combat the inflation crisis that originated under the Biden administration – even though the U.S. economy shrunk 1.6% in the first quarter of 2022 and the Federal Reserve first increased the interest rate in March.

“Coming off of last year’s historic economic growth – and regaining all the private sector jobs lost during the pandemic crisis – it’s no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation,” the statement said. “But even as we face historic global challenges, we are on the right path and we will come through this transition stronger and more secure. Our job market remains historically strong, with unemployment at 3.6% and more than 1 million jobs created in the second quarter alone. Consumer spending is continuing to grow. Earlier this week, I met with the Chairman of SK Group from Korea, just one of the companies investing more than $200 billion in American manufacturing since I took office, powering a historic recovery in American manufacturing.”

It should be noted that the job market is actually cooling down and is not “historically strong.” As noted by The Wall Street Journal, jobless claims are at nearly their highest point of the year and are above prepandemic levels.

“Initial jobless claims, a proxy for layoffs, fell 5,000 to a seasonally adjusted 256,000 in the week ended July 23 from the prior week’s upwardly revised level, the Labor Department said Thursday. The prior week’s reading was revised up by 10,000 and was the highest level of claims since November,” The Wall Street Journal reported. “Last week’s claims stood above the 2019 prepandemic weekly average of 218,000, but remained at a level generally consistent with a solid labor market. The four-week moving average for claims, which smooths weekly volatility, inched up to 249,250 last week, an increase of 6,250 from the previous week’s revised average.”