CUNA Senior Economist Dawit Kebede issued the following statement after the U.S. Commerce Department released its second-quarter gross domestic product (GDP) report:
“Real Gross Domestic Product (GDP) decreased by 0.9% for a second consecutive quarter due to significant decline in private inventories and investment in new housing.
“Personal consumption, which accounts for two-thirds of the economy, continued to increase but it slowed down relative to the first quarter. Spending on services offset the decline in goods spending. The trade deficit, which was a major reason behind the first quarter decline, improved on account of strong export activity.
“We are not in a recession just because we have two quarters of decline. Consumer spending and a strong labor market continue to be the firewall against a significant and widespread decline in economic activity. However, Federal Reserve's resolve to fight inflation by slowing consumer demand will thin out this defense.”