Looking to the Futures: GDP Declines for a Second Straight Quarter

The U.S. has experienced another quarter of reduced output, in the face of high inflation and rising interest rates.

Gross Domestic Product (GDP), an economic figure that measures the amount of goods and services produced across the economy, was released by Bureau of Economic Analysis Thursday morning.

With recession concerns front and center, U.S. GDP came in lower than expected at -0.9% annually for Q2, versus the estimated +0.4%, following Q1s -1.6% contraction.

This report indicated the economy met the main street definition of a recession, which is two consecutive quarters of declining GDP. Although meeting this loose definition, Treasury Secretary Janet Yellen stated Thursday that the U.S. economy is more in a state of transition, not a recession.

Many investors bought into this thinking, as U.S. index prices finished broadly higher yesterday. Many also hold reservations against the Fed’s ability to create a soft landing, as members had previously stated inflation was transitory as well.

Making up the GPD Q2 annualized figure; residential investments subtracted -0.71%, food and beverage production shrank -0.65%, durable goods were -0.22% lower, food services increased +0.6%, healthcare +0.4%, and recreation improved +0.16% on an annual basis.