US Economy Shrank In The Second Quarter, Signaling A Possible Recession

 

Photo credit: Gage Skidmore/CC BY-SA 2.0, via Flickr

Are we heading into a recession? What are Biden's Economic Plans?

According to the Bureau of Economic Analysis, the US economy contracted for the second straight quarter from April to June, hitting a widely accepted rule of thumb for a recession. 

The second quarter GDP numbers just release and they show another contraction for the second quarter which could signal the US Economy is in recession. 

After the federal reserve raised interest rates again yesterday, the FED chair said the path to avoiding recession is narrowed. It is a very complicated situation. See, people don't like to hear that the KPI is shrinking. But remember by raising rates, that is what Jerome Powell is trying to do. And to simply say, we have a good economy, or we have a bad economy.

What is causing inflation in the US?

You have seen war in Ukraine. Also, we have supply chain issues that are still lingering from covid. This is complicating things. But you just laid out a few of the points. When you normally have a contracting economy, you don't have sizable wage growth or unemployment as low as it is. You'll see help wanted. And people are concerned house prices are softer, they are still above pre-pandemic levels.

And just eye a few months ago we were hoping to get some relief in the housing market. So what we have on our hands is a complicated confusing economy. I know politicians don't like that because that doesn't work on a billboard when you want to beat the other side up, but that is what we've got. 

And inflation obviously plays into this. If it is a semantic game almost. If you are in a recession or not, as if you are running a small kind of business and you can't find anybody to work in your shop and it feels like a recession. Go purchase anything and things are more expensive. So naturally one would feel that way. 

What we need to do right now is figure out what people need to do to be saving because what we're heading into, more than anything, is uncertain times. But to say that this Biden Administration isn't addressing things, they are talking about chips or broadband, lowering the price of pharmaceuticals, you're actually seeing democrats try to make moves that will make life easier and more affordable for the American people. 

And while it is easy for republicans to beat on the inflation story because everybody out there is talking about it, they have not yet offered any alternate solutions. It is complicated. And certainly, the White House has been out there in recent days pushing back against the idea of this being labeled a recession even if it technically meets the criteria. 

Talking about the definition of a recession, when my mother goes to the grocery store and complains about the price of milk, she's not worried about the definition of recession. 

What they need to be doing is affordable more affordable broadband. Once they get things lower in terms of pharmaceutical pricing, show people how to access that. Right now we're in this circle with this media blitz and it is not doing much for anyone. If democrats could pull this off, it is a really big deal.

Inflation is not unique to the united states. It is happening everywhere. But again when somebody is out there buying gas, even though this is getting more than it was a month ago, it is more expensive than a year ago and people at the gas stations in New York, New Jersey, and Connecticut, aren't thinking about the price of gas in France and this is a very unpredictable situation. It is a very complicated situation.