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Economic News

A Second Drop by U.S. Real GDP ... but Still No Official Recession

July 28, 2022
Benoit P. Durocher
Principal Economist

Summary of the publication

Real GDP in the U.S. shrank at an annualized rate of 0.9% in the second quarter, in line with our expectations. Forecasters had called for a small gain of 0.4%.

This decline was preceded by a 1.6% drop in the first quarter. A technical recession is defined as two consecutive quarters of falling real GDP, which means the U.S. economy has technically been in a recession since the start of 2022.

That being said, the United States doesn’t use this definition to determine when an official recession begins, instead relying on a committee at the National Bureau of Economic Research. The committee looks at a wider range of factors—not just real GDP—to determine U.S. economic growth cycles. Evidently, the conditions aren’t in place to declare a recession, especially since the labour market is still showing signs of strength.

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