America tips into recession and threatening to take the global economy down

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Second successive drop as growth retreats 0.9% in the three months to June

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T

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he US economy has dived into an unofficial recession threatening to take the world economy down with it.

According to official figures from the commerce department the US economy dipped 0.9% in the three months to June, the second successive quarter the economy has contracted – the official measurement of a recession.

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Analysts were understood to have been expecting an increase of 0.5%.

However, the downturn in US fortunes has not yet been officially classified as a recession despite having all the hallmarks of one. The National Bureau of Economic Research (NBER) is the official arbiter of when a recession begins. Although it will be a huge blow for the Biden administration that has been trying every measure to keep the runaway economy under control.

In the first three months of the year, the US economy shrank at an annual rate of 1.6%.

In the final quarter of last year the US staged a blistering comeback from the cornonavirus pandemic with a 6.9% annual increase in Gross Domestic Product (GDP ).

The revelation is yet to hit the Dow Jones index of shares that has stayed relatively stable in early trading.

Inflation has hit fuel, food, accommodation and other necessities across the US rising at the fastest pace since 1981 causing a deep cost of living crisis. Prices rose at an annual rate of 9.1% in the year until June.

The latest figures follow yesterday’s announcement that the Federal Reserve would add another three-quarter of a percentage point to its base interest rate to try and tame spiking inflation in the US.

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Credit: www.standard.co.uk /

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