US economy drops at 0.6% annual rate from April through June

Battered by surging consumer prices and rising interest rates, the US economy shrank at a 0.6% annual rate from April through June, the government announced Thursday, unchanged from its previous second-quarter estimate.

It marked the second consecutive quarter of economic contraction, one informal rule of thumb for a recession. Most economists, citing a strong and resilient American job market, believe the world's biggest economy is not yet in a downturn. But they worry that it might be headed for one as the Federal Reserve ratchets up interest rates to combat inflation.

Consumer spending grew at a 2% annual rate, but that gain was offset by a drop in business inventories and housing investment.

The US economy has been sending out mixed signals this year. Gross domestic product, or GDP, went backward in the first half of 2022. But the job market has stayed strong. Employers are adding an average 438,000 jobs a month this year, on pace to be the second-best year for hiring (behind ..