The U.S. gross domestic product (GDP) has shrunk for two consecutive quarters, meaning the U.S. economy is in a technical recession.
In the past few days, US President Biden, Treasury Secretary Yellen, Federal Reserve Chairman Powell and others have stepped forward to "fire the fire" to stabilize people's hearts, denying that the US economy is in recession.
But the market is clearly not so judgement.
This is terrible bad news - the real recession may not be here yet.
The U.S. Bureau of Labor Statistics released June inflation data. The consumer price index (CPI) rose 9.1% year-on-year, the highest level in 40 years; the United States added 372,000 non-farm jobs in June, an increase far exceeding market expectations, and the unemployment rate remained unchanged. at 3.6%.
By traditional measures, inflation is well above the 2 percent target, and unemployment is significantly below the natural rate of 4.5-5 percent.
This is a typical overheated state of the economy.
However, the latest data from the U.S. Commerce Department showed that U.S. GDP fell by 0.9% in the second quarter from the previous quarter, while GDP in the previous quarter also fell by 1.6% from the previous quarter.
Why is GDP growing negative for two consecutive quarters when the economy is overheating?
To answer this question, go back to the relationship between GDP and the economic cycle...
For details, please read the 328th issue of "Hong Kong 01" Electronic Weekly (August 1, 2022) "The
U.S. economy is overheating but GDP growth is negative, why?
".
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