The Federal Bank of Atlanta released a major red flag Thursday that the U.S. economy just entered a general slow down of the economy or a recession.
U.S. gross domestic product (GDP) growth in the second quarter of 2022 fell to -1% based on available data for the current measured quarter, the Atlanta Fed reported.
The Atlanta Fed uses the GDPNow model as an unofficial forecast to estimate the U.S.’s GDP growth based on a similar methodology used by the U.S. Bureau of Economic Analysis, the fed stated.
“The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2022 is -1.0 percent on June 30, down from 0.3 percent on June 27,” the Atlanta Fed reported.
Data from the U.S. Bureau of Economic Analysis and the U.S. Census Bureau showed that real personal consumption expenditures growth and real gross private domestic investment growth fell in the second quarter, the fed reported.
Real personal consumption expenditures growth fell from 2.7% to 1.7%, while real gross private domestic investment growth decreased from -8.1% to -13.2%, according to the Atlanta Fed.
The National Bureau of Economic Research (NBER), which tracks recessions in the U.S. throughout history using real personal income less transfers, nonfarm payroll employment, employment as measured by the household survey, real personal consumption expenditures, wholesale-retail sales adjusted for price changes, and industrial production, says the average recession in the U.S. from 1945 to 2009 lasted 11 months, Forbes reported.
“A recession is the period between a peak of economic activity and its subsequent trough, or lowest point,” NBER stated. “The NBER’s definition emphasizes that a recession involves a significant decline in economic activity that is spread across the economy and lasts more than a few months.”
NBER declared the U.S. was officially in a recession due to the COVID-19 pandemic in 2020.
Economist and visiting Heritage Foundation fellow Stephen Moore told Fox Business’s “Varney & Co.” on Monday he believed the U.S. was currently in a mild recession after the “first six months of the year have been negative for growth.”
“Then when you add to that the fact that people’s incomes in real terms are falling really fast, something like $2,000 to $3,000 a year, that’s a recession,” Moore said on Fox Business. “So yeah, we’re in a recession.”
“Right now I’m not hearing much positive out of this White House in terms of how to combat a recession when they talk about higher taxes, more price controls, more regulations and more spending,” he added, according to Fox. “That’s going to make the problem worse.”
U.S. Treasury Secretary Janet Yellen dismissed fears of a recession at the June New York Times’s DealBook D.C. policy forum when CNBC host Andrew Ross Sorkin asked Yellen to respond to questions about the Biden administration’s plan to “announce” that the country was in a recession.
“Don’t look to me to announce it. I’m not going to announce it,” said Yellen. “I don’t think we’re going to have a recession.”
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