U.S. GDP cringes 0.9% in Q2 raising recession signal

U.S. economy shrunk for the second straight quarter from April to June, as the Gross Domestic Product (GDP) fell 0.9 percent at an annualized pace for the period, the government agency Bureau of Economic Analysis (BEA) reported on Thursday.

The National Bureau of Economic Research (NBER) has declared officially recessions and expansions, adding that won’t be any judgment on the period in question for months.

The affected the employees’ layoff rate as it still elevated, another report on Thursday showed.

The initial jobless claims 256,000 for the week ended in July 23, which decreases 5,000 from the upwardly revised level of the previous week.

The GDP negative affect meets a long-held basic view of recession, despite the unusual circumstances of the decline and regardless of what the NBER decides.

Mark Zandi, chief economist at Moody’s Analytics said “we’re not in recession, but it’s clear the economy’s growth is slowing,” adding, “the economy is close to stall speed, moving forward but barely.”

Markets reacted little to the news, with stocks slightly lower at the open. Government bond yields mostly declined, with the biggest drops at the shorter-duration end of the curve.