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U.S. Economy Shrank Less Than Previously Estimated, Easing Recession Fears

CBS News

The U.S. economy shrank at a 0.6% annual rate from April through June, the government said Thursday — a slight upgrade from its initial estimate and a sign that this year’s drop in growth is less steep than originally feared. 

Most economists have said they doubt the economy is in, or on the verge of, a recession, noting that hiring remains strong, with low unemployment and ample job openings. Still, inflation is near a four-decade high and is punishing consumers and businesses. And the Federal Reserve’s concerted campaign to tame inflation by driving up interest rates is raising the risk of a “hard landing” for the economy. 

“Recent employment and consumption data all but indicate the economy is not in a recession,” Lydia Boussour, lead U.S. economist at Oxford Economics, said in a report. “But a faltering housing market and souring economic sentiment are clear signs that elevated inflation and higher borrowing costs are taking a toll on the economy.”