Second Quarter GDP Growth Figures to be Released
The US Bureau of Economic Analysis will release its estimated second quarter GDP figures today.
The US economy experienced a -1.6% GDP growth in the first quarter. This first-quarter drop was largely caused by widening trade deficits, propelled by an increase in net imports and consumer spending, alongside job growth.
Today’s announcement comes after the Federal Reserve increased interest rates by 0.75% yesterday, intensifying pressure on the Biden Administration to promote economic activity and stem inflation rates before midterm elections in November.
However, economists predict that the second quarter data will again show a -1.6% GDP growth, leading to suggestions that the US economy is experiencing a recession, marked by two consecutive quarters of economic contractions.
Expect today’s GDP growth figures to reveal a technical recession or gradual increase. Importantly, this will likely spur a political messaging battle between Republicans and Democrats in the short-term over the effectiveness of Biden’s post-pandemic economic policies. If economic activity remains subdued up until the midterm elections, voters will likely abandon Biden and his economic agenda at the ballot this November, potentially creating a strong showing for Congressional Republicans and Republican state governors and further jeopardizing the administration’s tenuous support.
