What do you know about the shrinking economy? America's economy is shrinking!

What do you know about the shrinking economy? America's economy is shrinking!

Updated on July 30, 2022 12:39 PM by Andrew Koschiev

Shrinking economy!

The shirking economy known as the grocery shrink ray, deflation, is the process of items shrinking in size or even sometimes reformulating or reducing quality. At the same time, their prices remain the same or increase.

Financial losses!

America’s gross domestic product has declined for two consecutive quarters, meeting one technical definition of a recession. Factories are shutting down, and a wave of job losses and few open positions are some of the financial losses that batter most industries.

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According to the first reading from the Commerce Department, the second quarter of the US GDP fell at an annualized rate of 0.9%, followed by a contraction of 1.6% during the first three months. Economists have warned that is a risk as the Federal Reverse hikes interest rates and inflation curbs consumer spending.

Related: Are we in a recession or not? Are you confused about whether the US economy is in a recession?

Inventories or goods!

Companies stocked up on many items as they attempted to dodge supply chain problems and ensure they could meet resurgent demand. Between April and June, the subsequent slowdown in inventory accumulation contributed to a large chunk of the contraction.

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Two main reasons!

Two main reasons are watching the speed at which US inventories grow as an indicator. If customers buy fewer products, companies won't place new orders, which will weigh on factory output if companies are forced to get rid of unwanted inventory with hefty discounts as it will pressure revenue and profits.

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Amazon tech slump!

On Thursday, the e-commerce giant reported net sales of more than $121 billion between April and June, a 7% increase from the same quarter last year and higher than Wall Street’s estimates. Amazon stock surged 12% in premarket trading as investors shrugged off the company's $ 2 billion loss.

Most valuable tech company!

Apple looked less impressive as the company revenue of $83 billion was up just 2% from last year and a marked slowdown from the breakneck growth in 2021. Profit declined nearly by 11%. Microsoft, Google, and Amazon Web Services posted a profit of $5.7 billion. The unit revenue nearly hit $20 billion, a 33% increase from the same period.

China’s leader’s economic goal!

China’s top leadership has gone quiet on the growth targets for the year as the world’s second-largest economy battles an economic slowdown that is self-inflicted. The country would aim for gross domestic product to rise by about 5.5% this year.

Related: Millions of people are suffering from loss of smell or taste from Covid!

The International Monetary Fund lowered its forecast for GDP growth in China to just 3.3% this year as Covid-19 lockdowns, and a crisis in the real estate sector weighed on its expansion. The US jobs report for July will be closed for evidence the economy is slowing falser than expected.

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