Thursday, July 28, 2022 8:54 amThursday, July 28, 202230 Comments

• News

The U.S. economy shrank in the spring for the second consecutive quarter, entering a technical recession as rampant inflation and higher interest rates forced consumers and businesses to pull back on spending.

Megan Henney for FOX Business:

Gross domestic product, the broadest measure of goods and services produced across the economy, shrank by 0.9% on an annualized basis in the three-month period from April through June, the Commerce Department said in its first reading of the data on Thursday. Refinitiv economists expected the report to show the economy had expanded by 0.5%.

MacDailyNews Take: Bzzt! Wrong yet again, “experts.”

Economic output already fell over the first three months of the year, with GDP tumbling 1.6%, the worst performance since the spring of 2020, when the economy was still deep in the throes of the COVID [response]-induced recession.

Recessions are technically defined by two consecutive quarters of negative economic growth and are characterized by high unemployment, low or negative GDP growth, falling income and slowing retail sales, according to the National Bureau of Economic Research (NBER), which tracks downturns.

With back-to-back declines in growth, the economy meets the technical criteria for a recession, which requires a “significant decline in economic activity that is spread across the economy and that lasts more than a few months.” Still, the NBER — the semi-official arbiter — may not confirm it immediately as it typically waits up to a year to call it.

MacDailyNews Take: As we wrote earlier this week, unfortunately, in an indictment of the U.S. education “system,” for new generations, tough lessons have to be retaught and learned the hard way.

Stop the misguided crusade against domestic energy production and profligate federal spending and inflation will be stopped dead in its tracks. It’s not difficult. – MacDailyNews, May 11, 2022

‘Tis best to get a handle on inflation, if you know how, while you still can. – MacDailyNews, May 11, 2021

In January, Interactive Brokers founder Thomas Peterffy said, “Inflation is 7% — 1% or 2% [in interest rate hikes] doesn’t mean anything. If they really wanted to stop inflation, they would have to raise rates to 4%, 5%, 6%.”

Inflation is repudiation. — Calvin Coolidge

When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill… [which] comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. — Ronald Reagan

As we continue the slog through this malaise, remember: It’s always darkest before the dawn.

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