It’s Official: America Enters a Recession

July 28, 2022

For the second consecutive quarter the U.S. economy shrank, marking the beginning of a recession. Gross domestic product shrank .9 percent after falling 1.6 percent in the first quarter of 2022. 

Wall Street Journal: The U.S. economy shrank for a second quarter in a row—a common definition of recession—as businesses trimmed their inventories, the housing market buckled under rising interest rates, and high inflation took steam out of consumer spending. . . 

The GDP report offered some discouraging signs, and underscored the challenges facing U.S. businesses, consumers and policy makers—including high inflation, weakening consumer sentiment and supply-chain volatility.

Consumer spending accounts for roughly two-thirds of total economic output, and Thursday’s report showed Americans spent at a cooler clip in the second quarter. Business investment worsened slightly. The housing sector slowed as borrowing costs rose.

The GDP data follows a brutal week of economic news. Consumer confidence decreased more than expected to the lowest level since early 2021. Additionally, the Federal Reserve hiked interest rates, raising borrowing costs for consumers and businesses.

Polls have found that most Americans believed the country was already in a recession as their real wages shrank and costs soared.

Bottom Line:  Democrats’ reckless spending broke our economy — now, the country is entering a painful recession.