Jakarta –
The United States (US) economy in the second quarter of 2022 was recorded at minus 0.9%. Quoted from npr.org, this is a contraction that occurred for two consecutive quarters. In the first quarter of 2022, gross domestic product (GDP) was minus 1.4%.
In the npr.org report, it is stated that the negative economic growth of a country in two quarters is often considered as a recession. However, the US government refuses to call it a recession but only a slowdown.
The White House denies this economic condition is entering the brink of recession. US Treasury Secretary Janet Yellen earlier in NBC’s Meet the Press said despite two consecutive quarters of the US economy has not entered into recession.
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“When you can open 400k new jobs in one month, it’s not recession,” he said, quoted from NPR, Thursday (28/7/2022).
Fears of this recession occur when the US central bank The Federal Reserve (Fed) continues to hoist benchmark interest rates aggressively to fight insane inflation.
However, the economic data released by the government is very mixed. As the number of workers increases. “This is not a recession, a recession is a broad economic downturn, we don’t see it now,” he said.
Yellen uses a benchmark for public spending which remains strong and credit quality is still positive.
NBER said a recession is a significant decline in economic activity that spreads across all economic areas and lasts for several months.
Employment is one of the indicators that is calculated. In June, the unemployment rate in the US was stable at 3.6% and near the lowest level before the pandemic and there has been an increase in the number of workers to 372,000 people.
Currently the US economy is slowing down, prices are rising insanely, the housing market is starting to sluggish because of rising benchmark interest rates.
Quoted from CNBC, Moody’s Analytics Chief Economist Mark Zandi said this condition is not yet a recession. “But what is clear is that economic growth is slow,” he explained.
This economic contraction occurred from various factors such as declining investment in housing and non-residential to federal and state government spending.
Then consumer spending as measured through personal spending rose only 1%. Then service spending rose 4.1% but was offset by a decline in consumption of non-durable goods by 5.5% and durable goods by 2.6%.
He said inflation is the main problem of the US economy. The inflation rate which touched 8.2% missed the forecast of many economists.
(dna/dna)
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