Former Federal Reserve Bank of Atlanta President Dennis Lockhart discusses what’s next for the FOMC and whether the US is close to recession in “The Claman Countdown.”
The final revision to first-quarter gross domestic product due out on Wednesday is expected to confirm a deeper contraction in the U.S. economy than previous readings, and the new GDP data could support the idea that a recession is underway or ahead, economists say, as inflation rages and stocks head for the worst first half since 1970.
The initial report released by the Commerce Department in April showed gross domestic product, the broadest measure of goods and services produced in the economy, fell 1.4% on an annualized basis during the period. three months from January to March in a surprise tumble after economists polled by Refinitiv had expected GDP growth of 1.1% for the quarter.
A trader works on the floor of the New York Stock Exchange NYSE in New York, U.S., June 16, 2022. (Photo by Michael Nagle/Xinhua via Getty Images/Getty Images)
A revision last month indicated that the economic contraction has likely worsened to 1.5%, and the latest GDP estimates from Goldman Sachs expect that number to hold.
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The contraction last quarter was the first drop in GDP since the second quarter of 2020, when the United States was in the grip of the COVID-19 recession. The 2022 decline also followed a solid 6.9% expansion in the last three months of 2021.
Traders work on the floor of the New York Stock Exchange NYSE in New York, United States, June 16, 2022. (Photo by Michael Nagle/Xinhua via Getty Images/Getty Images)
Economists expect some slowing in the economy as the Federal Reserve continues to raise interest rates to calm inflation and will seek indications of whether a full-blown recession – defined by two consecutive quarters of contractions – getting ready.
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If Wednesday’s final revision from the Bureau of Economic Analysis confirms an economic contraction for the final quarter, as expected, then all eyes will be on the agency’s release of its second-quarter GDP advance estimate on July 28.
Federal Reserve Chairman Jerome Powell (Photo by AL DRAGO/AFP via Getty Images/Getty Images)
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The Federal Reserve Bank of Atlanta’s GDPNow tracker indicated earlier this month that the economy may be heading for a decline in GDP in the second quarter, after showing economic growth stalled in the spring at 0% – down sharply from its previous estimate of 1.3% on June 1 and 0.9% on June 8.
Megan Henney and Lucas Manfredi of FOX Business contributed to this report.