The U.S. economy contracted by 0.9% for the second quarter this year, Is this the beginning of a recession?

According to government data the U.S. economy contracted for a second quarter between April and June hinting recession months before key midterm elections. The U.S. Commerce Department reported that the gross domestic product declined by 0.9% in the second quarter following the first three months of the year.

Successive amount of negative growth in two quarters back to back can be observed as a strong sign of recession. However, U.S. President Biden is confident regarding the economy and says that the US economy is not suffering a downturn while his critics point out major mismanagement by the Democrats. In the first three months of the year, the U.S. has seen a decline of 1.6% which is the reason the US government has cut down on investments in autos, private, and real estate sectors. The U.S. economy is currently undergoing inflation because of the pandemic affecting its supply chain networks and sanctions due to the Russian invasion hiking fuel prices.

Meanwhile the Federal Reserve has increased the interest rates which has slowed down the economy. Experts say that inflation is hovering over the U.S. as the expense for personal consumption has also increased by 7.1% in the last three months.

The experts also criticized that the Biden administration is deliberately denying the initiation of inflation and the following recession. However, Mr. Biden said, “We’re not going to be in a recession, in my view,” as the labor market is strengthening in a full swing. He also added that the U.S. economy is adding more jobs and has a low rate of unemployment which are markers that the country is safe from falling into recession.

Meanwhile, the central bank also announced its biggest interest rate hike of 75 basis points on July 27 which is the fourth increase in 2022.