The Bureau of Economic Analysis recently reported the real gross domestic product (GDP) has dropped at an annual rate of 0.6%.
This drop follows a dip of 1.6% during the first quarter of the year, according to an Aug. 25 BEA news release.
“Real GDP decreased less in the second quarter than in the first quarter, decreasing 0.6% after decreasing 1.6%,” according to the release. “The smaller decrease reflected an upturn in exports and a smaller decrease in federal government spending that were partly offset by a larger decline in private inventory investment, a slowdown in consumer spending and downturns in nonresidential fixed investment and residential fixed investment.”
This latest GDP estimate is based on more extensive data than was accessible for the July advanced forecast, which showed a 0.9% decline in real GDP, the release reported.
According to the BEA, this reduction in real GDP is primarily attributable to decreases in private inventory investment, residential fixed investment and federal government spending. This decline was also likely caused by state and local government expenditure, which is somewhat countered by increases in exports and consumer spending.
Meanwhile, imports, which are subtracted from the calculation of GDP, increased, according to the release.
Overall, the GDP increased, with current dollar GDP increasing 8.4%, or $496.2 billion, in the second quarter to $24.88 trillion, a $31.1 billion rise above the earlier estimate, the release reported. Personal income in current dollars also rose by $353.1 billion during the second quarter, a decrease of $0.7 billion from the earlier estimate.
The bulk of these gains was due to income, driven by private wages and salaries, owners' income including nonfarm and farm, personal income receipts on holdings and rental income, according to the BEA.
The real gross domestic income also rose 1.4% during the second quarter, compared to 1.8% during the first quarter, the release reported. In contrast to the first quarter's decrease of $63.8 billion, the second quarter experienced a rise of $175.2 billion in profits from current production.
The criteria of a recession varies between nations, although a decrease in real GDP for two consecutive quarters is widely regarded as a standardized indicator of a recession.
According to a White House news release, other criteria, including as unemployment, expenditure, industrial output and income, should be included in this definition.
