For two consecutive quarters of GDP decline, has the US economy decline?Who said it?

On July 28, local time, the first estimated data released by the US Department of Commerce showed that in the second quarter of this year, the GDP (GDP) of the United States (GDP) calculated by 0.9%at an annual rate, while expected to increase by 0.4%. This is the United States GDP declined for two consecutive quarters. In the first quarter, the US GDP fell 1.6%. The decline of GDP for two consecutive quarters is also called "technical decline".

The news immediately detonated whether the US economy had fallen into a dispute. However, US officials do not accept this definition, saying whether the decline occurs, which is a conclusion that an American college economist can only give it through a period of comprehensive analysis after a period of time.

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Is it a decline?

The US economy is facing a new high of 40 years. In order to control inflation, the Fed has raised interest rates four times in a row, and in June and July, 75 basis points raised interest rates, and their strength was the first time in more than 40 years.

In the early 1980s, the then Fed Chairman Paul Walker continued to increase the level of inflation from the dual digit in early 1980 by the continuous rate of interest rate hikes, but the price was twice in the US economy twice in two years. Under the rhythm of the Federal Reserve's equally radical interest rate hike, economists from major investment banks warned the US economist to fall into a recession.

The GDP data in the second quarter further exacerbated concerns about economic recession. After all, the decline in GDP for two consecutive quarters was widely regarded as the definition of recession.

Republicans immediately took data to say that the Democratic Party's policy should be responsible for it. The US economy has fallen into the "Joe Biden’ s Recession. "

"Biden and the Democratic Party caused our economy to shrink, and they were still worse," said Ronna McDaniel, chairman of the Republican National Committee.

Biden said that because the US economy recovered strongly after the epidemic crackdown last year (GDP increased by 6.7%in the second quarter of 2021), the year -on -year base was high, and the Federal Reserve began to raise interest rates this year, the economic growth rate was not surprising. It is actually consistent with the transformation of the economy to "stable growth and lower inflation".

Biden attracted attention to the strong part of economic data. "Wall Street and experts will have a lot of discussions about whether we have fallen into a decline today. But if you look at the labor market, consumer expenditure, and commercial investment, you will see that there are many economic improvements in the second quarter." As soon as I was on July 28th.

From the perspective of economic data, data in the second quarter shows that consumer expenditures accounted for more than two -thirds of American economic activities increased at a rate of 1.0%. Although the growth rate was less than expected, it was still growing. The employment situation is still good, and the unemployment rate in June has remained at a historical low of 3.6%for the fourth consecutive month.

The Minister of Finance Yellen then said, "We did see a significant slowdown in economic growth", but the real decline was "extensive economic weakened". This situation has not occurred, and the economy is still generally strong, especially employment, especially employment aspect.

Who said it?

Yellen emphasized whether the decline of the US economy can make formal judgment only by economists from the National Institute of Economic Research in the United States. James Poterba, president and CEO of the institute, also said on the same day that the expert committee who determined the recession did not recognize that the decline in GDP in two consecutive quarters was decline.

The National Economic Research Institute of the United States is a non -profit academic institution. The institution's "Business Cycling Measurement Committee" is responsible for the exact point of determining the decline in the US economy. It is reported that the committee consists of eight economists from universities from all over the United States.

The institute defines economic recession as "a significant decline in activities in various fields in the economy and lasts for more than a few months." Compared with the "technical recession" standard, the economic data inspected by the committee is much more comprehensive, including GDP, employment data, family income, consumer expenditure and industrial production, and these data are considered together. GDP data does not occupy particularly important positions.

Bob Hall, chairman of the committee and professor of Stanford University, pointed out that the basis for determining the decline is mainly the severity of economic atrophy. For example, the new crown epidemic in 2020 led to a sharp decline in economic activities, and it was finally judged as a decline, although this recession lasted only two months from time to time. The gentle decline of GDP in the first two quarters of this year is likely to fail to reach the definition of the committee's decline, because the committee only considers the "significant" decline in economic activities.

On the other hand, unlike the real -time judgment of "technical recession", the committee's official announcement of the decline is usually carried out after the decline has ended several months or even a few years. This is because the committee must collect as much economic data as possible as possible Only on the basis of careful analysis, the specific time point of the beginning and end of the recession can be given. For example, the decline in 2020 was officially made in July 2021.

However, although this "technical recession" may not be enough to decline, many economists believe that it is a matter sooner or later.Bloomberg's model shows that the probability of falling into a recession by the US economy in early 2024 was 100%.The recession in Germany's prediction is in mid -2023, and Wells Fargo predicted in early 2023.The prediction time given by Nomura was the earliest, at the end of 2022.The Federal Reserve President Powell has always insisted that it is possible to achieve the economic "soft landing" (interest rate hikes caused the economy to cool down but not cause recession), but recently it is also acknowledged that the "challenge is very large" to achieve soft landing.

Reporter | Li Menglin

Edit | Wang Yuelong Lan Su Ying Gai Yuanyuan

School pair | Cheng Peng

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