SPIRALING TOWARDS RECESSION
Written by Peter Boykin on April 30, 2022
Shared By Peter Boykin – American Political Commentator / Citizen Journalist
The economy declined by 1.4% in the first quarter, shocking mainstream economists who were expecting 1% growth in our Gross Domestic Product (GDP). It’s a sharp drop off from last quarter’s 6.9% growth.
Gross Domestic Product (GDP) is how we measure the overall health of our economy – it factors in the value of all the goods and services produced during a specific time. In the U.S. we measure it by quarters of the year.
Looking under the hood: The main contributor to the declining GDP was our trade deficit, which shaved 3.2% off our GDP. In other words, we are increasingly relying on foreign countries for our goods:
Exports declined by almost 6%
Imports rose by 17.7%
Joe Biden said the GDP drop was caused by “everything from COVID and the COVID blockages that occurred along the way.”
…which is funny, coming from the guy who in April of 2020 tweeted that then-President Trump “needs to stop blaming others and do his job.”
Are we entering a recession? The declining GDP, paired with decades-high inflation, has most Americans rightfully concerned about a looming recession.
A recent poll found 75% of Americans think the economy will be in a recession within the next 12 months. [FDRLST/Susquehanna]
Deutsche Bank, a major global investment bank, earlier this week forecasted that the U.S. economy was on the brink of a “major recession.”
Recession is defined [generally] as two consecutive quarters of negative GDP growth. In this period, there is usually a decline in economic activity and employment. So we’re technically halfway there.
Is there any positive news? A little, with a caveat. Consumer and business spending rose by 2.7 and 9.2% respectively. So Americans are still spending money, which is a good sign.
The caveat is that a lot of that spending is happening on credit cards. Last quarter, Americans’ credit card balances rose by $52 billion – the largest increase on record.
[Source: WSJ, CNBC, Lending Tree, Wake Up Right]
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