Second-quarter GDP declined less than previously thought, but the economy is still shrinking

By Alicia Wallace, CNN Business

The US economy shrank at a slightly slower rate than estimated during the second quarter, according to updated data released Thursday by the US Bureau of Economic Analysis.

The nation’s gross domestic product — the broadest measure of economic activity — shrank 0.6% at an annualized rate from April through June. The activity was revised upward from the advanced estimate released in July, which showed a 0.9% decline.

Despite the upward revision, the latest estimates show an economy that has been contracting for two consecutive quarters, a threshold that’s generally considered an unofficial indicator of a recession (the official arbiter is a panel of National Bureau of Economic Research economists, who take an array of economic indicators into consideration).

Many economists, however, don’t believe the US is in the midst of a recession. They point to the strong labor market and heightened levels of consumer and business spending, production and income.

Whether it’s officially a recession might not matter to the average American. The past several months have been a time of historically high inflation that has not only eaten away at pay gains and savings accounts, but also Americans’ optimism about the direction of the economy.

Thursday’s report is the second of three estimates for quarterly GDP. The third revision, due in September, will be inclusive of additional economic data.

This story is developing and will be updated.

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