A ‘Technical Recession’ Is Confirmed

Data from the Commerce Department indicated that the U.S. economy was even weaker for the first half of 2022 than was initially thought.

After shrinking by 1.6% from January to March, the new data shows that the economy shrank an additional 0.6% from April through June. CNN Business states that a recession is “commonly defined as two consecutive quarters of negative growth,” and that is exactly what has happened in America since January of this year.

Many people have argued that the economy is not actually in a recession, no matter how much it seems like there is one. Some economists cite things like low unemployment, high incomes, and consumer spending as indicators that a recession is not yet here.

After the Commerce Department released its new numbers today, however, it is growing increasingly difficult to not call what is happening in America a recession.

According to Forbes, “The government blamed the worse-than-expected figure on declines in residential investments (or home buying), federal government spending and business inventories, but said an uptick in exports and spending helped economic activity improve from last quarter’s decline of 1.6%.”

While one working definition of a recession is two consecutive quarters of negative growth, that is not actually the technical definition. Wells Fargo senior economist Tim Quinlan says the definitive call is up to the National Bureau of Economic Research (NBER) and they define a recession as “a significant decline in economic activity lasting more than a few months.”

Basically a committee from the NBER will have the last say as to whether or not America has officially entered a recession, and the most recent GDP and GDI numbers will make it more difficult to not come to that conclusion.

According to Breitbart, the government also revised GDP upward for 2020 and 2021, a sign that Trump’s policies were already leading America out of a recession. The new numbers, being lower than previously thought, also show the true negative impact that the Biden-era aid packages and policies had on the American economy.