The US economy shrank for the second quarter in a row, a milestone that would be called an economic recession in many other countries.
That is not the case in the United States, where the decision is made using additional data.
However, the contraction, at an annual rate of 0.9 percent in the three months to July, has gained considerable notice as economic concerns rise.
Fears of a recession are growing as the US central bank hikes borrowing prices swiftly to attempt to calm the economy and reduce pricing pressures, if one has not already begun.
US President Joe Biden has attempted to argue that the economy is still healthy in the face of declining public confidence by pointing out that the unemployment rate is still a low 3.6 percent and hiring has remained steady.
He assured reporters this week that the economy “was not going to be in a recession” prior to the release of data from the Commerce Department
His adversaries in the Republican party then claimed that the White House was attempting to redefine the term.
The US economy contracted at an annual rate of 1.6 percent in the first three months of the year. At the time, experts ascribed anomalies in trade data as the cause of the GDP fall.
However, the report released on Thursday revealed a more pronounced slowdown, with growth being constrained by falls in the housing market, business investment, and government spending.
Consumer expenditure increased at a slower annual pace of 1% as people increased their spending on healthcare, lodging, and dining out while decreasing their spending on products and groceries.