Recession Fears Deepen as US Economy Contracts Again

By Staff, Agencies

The US economy contracted for a second straight quarter between April and June, according to official data released Thursday, adding fuel to recession fears and creating a headache for President Joe Biden ahead of midterm elections.

Gross domestic product declined at an annual rate of 0.9 percent in the second quarter, following a bigger drop in the first three months of the year, according to the Commerce Department.

Biden and his administration went all out to play down the troubling report, trying to pull focus instead to major legislative progress on measures to tame inflation, reduce debt and preserve America’s competitive edge.

White House press secretary Karine Jean-Pierre declined to comment on the Fed's monetary policy decision after it raised rates by three quarters of a percentage point.

She said the Biden administration will continue to let the Federal Reserve be independent.

But Republican critics were quick to seize on the report as proof of the veteran Democrat's mismanagement.

"The government just announced what every American has been feeling for nearly a year – we are in a recession," House Republican leader Kevin McCarthy said on Twitter. "Democrats would rather redefine a recession than restore a healthy economy."

But Fed Chair Jerome Powell agreed with Biden and other economists who say the GDP figures are inconsistent with other strong data.