Economy in recession range, with GDP contracting 0.9% in second quarter

GDP fell at a 0.9% annualized rate in the second quarter, a preliminary estimate from the Bureau of Economic Analysis showed Thursday morning.

The report marks the second straight quarter of declining inflation-adjusted GDP — a situation commonly used to define a recession. GDP tumbled at a 1.6% rate in the first quarter.

Thursday’s numbers indicate that the economy has been struggling to stay above water during the historic monetary policy tightening cycle by the Federal Reserve, which is trying to lower soaring inflation. Residential investment cratered, a sign of the housing market slowing as mortgage rates rise. Consumer spending on goods also turned negative.

“I was not surprised [the numbers] were soft,” Brian Marks, executive director of the University of New Haven's Entrepreneurship and Innovation Program, told the Washington Examiner. “It’s an estimate and we’ll see what happens, but it certainly does not come as a surprise.”