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Gross domestic product, the broadest measure of goods and services produced across the economy, shrank by 0.9% on an annualized basis in the three-month Another key measure of the economy's healthknown as final sales to private domestic purchasersalso rose 3% in the first quarter, edging up from 2.9% in the The U.S. economy shrank for a second quarter in a row this year, a third and final estimate from the Bureau of Economic Analysis confirmed Thursdayonce again signaling the start of a

Is the US Economy in a Technical Recession? Final GDP Shows Mixed Signals.

The debate continues: Is the U.S. economy officially in a recession? The U.S. economy shrank for a second quarter in a row this year, a third and final estimate from the Bureau of Economic Analysis confirmed Thursday once again signaling the start of a potential downturn. This has fueled ongoing discussions about whether we\'re experiencing a "technical recession."

What the Final GDP Report Says: Gross domestic product, the broadest measure of goods and services produced across the economy, shrank by 0.9% on an annualized basis in the three-month period ending in June. While this confirms a second consecutive quarter of negative growth, typically a hallmark of a recession, other economic indicators paint a more complex picture.

Key Data Points to Consider:

  • GDP Contraction: The headline figure of a 0.9% decline in GDP is concerning.
  • Strong Consumer Spending: Despite inflation, consumer spending remained relatively resilient, contributing positively to the overall economic activity.
  • Final Sales to Private Domestic Purchasers: Another key measure of the economy\'s health known as final sales to private domestic purchasers also rose 3% in the first quarter, edging up from 2.9% in the previous period. This indicates underlying strength in domestic demand.

Technical Recession vs. Official Recession: It\'s crucial to understand the difference between a "technical recession" and an official recession. A technical recession is defined as two consecutive quarters of negative GDP growth. However, the National Bureau of Economic Research (NBER) is the official arbiter of recessions in the US. They consider a broader range of factors, including employment, income, and sales data, to determine whether a recession is truly underway.

The Bottom Line: While the final GDP report confirms a second quarter of contraction, strong labor market conditions and continued consumer spending suggest the situation is nuanced. Whether the U.S. economy is officially in a recession remains to be seen, and the NBER\'s assessment will be the ultimate determining factor. We\'ll continue to monitor the latest economic data and provide updates as they become available.

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