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US Slowdown Puts Economy on Path to Ever-More-Likely Recession

  • GDP report shows economy contracted for a second quarter
  • Consumers are struggling under high inflation, Fed tightening
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US Economy Shrinks for Second Straight Quarter

The US economy is losing momentum heading into the back half of the year, highlighted by the government’s latest report card that showed weaker consumer spending and declines in business and residential investment.

While the economy shrank for a second straight quarter -- meeting one rule of thumb for a recession -- economists and Federal Reserve Chair Jerome Powell are skeptical, largely due to a strong labor market. Still, odds of a downturn, possibly as soon as yearend, are mounting as households and companies succumb to the weight of decades-high inflation and rising interest rates.