The US economy shrank for a second consecutive quarter, Gross domestic product (GDP) fell at a 0.9%, increasing the likelihood of a recession.
"We think it's necessary to have growth slow down. We actually think we need a period of growth below potential in order to create some slack so that the supply side can catch up. We also think that there will be, in all likelihood, some softening in labor market conditions."
- Jerome Powell, Chair of the Board of Governors of the Federal Reserve System
The report revealed decrease in business and government spending and residential investment.
Inflation has decreased Americans' purchasing power, and a stricter Federal Reserve monetary policy has hurt interest rate industries like the property market.
Retailers like Walmart Inc. and Target Corp. have slashed their profit forecasts. Tech companies, including Shopify Inc., plans to cut workers. Apple Inc. and Microsoft Corp. are slowing hiring.
The rule of thumb for recessions is two consecutive quarters of declining GDP, determined by a group of academics at the National Bureau of Economic Research.
