Even on the Eve of BEA Report Showing GDP Shrank in Second Quarter, Media and Economists Were Still Predicting Growth

By Craig Bannister | July 28, 2022 | 11:53am EDT
(Getty Images/Richard Levine)

On Thursday, the U.S. Bureau of Economic Analysis (BEA) announced that the nation’s Gross Domestic Product (GDP) had contracted – but, just a day earlier, media and economists were predicting that it had grown.

As Thursday’s BEA report explains, GDP contracted for the second consecutive quarter in the April-June period:

“Real gross domestic product (GDP) decreased at an annual rate of 0.9 percent in the second quarter of 2022, following a decrease of 1.6 percent in the first quarter. The smaller decrease in the second quarter primarily reflected an upturn in exports and a smaller decrease in federal government spending.”

On Wednesday, however, Bloomberg was still promoting predictions of growth. In “US Economy Seen Narrowly Averting Back-to-Back Contractions,” Bloomberg reported that “Second-quarter GDP forecast to rise 0.4% after 1.6% drop” and that only about “a third of economists said GDP declined.”

“Economists expect gross domestic product grew an annualized 0.4% in the April-June period,” Bloomberg reported. “The economy may grow just enough to avoid two straight quarters of economic contraction, a common rule-of-thumb definition for recession, but forecasts vary widely.”

Likewise, on Wednesday, CNBC reported “Second-quarter GDP forecast to rise 0.4% after 1.6% drop.” However, CNBC was somewhat more cautious in its report, running the headline: “The economy is expected to have barely grown last quarter and it may have contracted.”:

“The estimates show the economy may have grown by several tenths of a percent. Goldman Sachs expects a 1% increase, while Moody’s Analytics sees a 1% decline.”

Still, CNBC highlights forecasts by economists with companies like Goldman Sachs, JP Morgan, and NatWest Markets who expected GDP to grow by as much as 1.6% in the second quarter, some of whom even raised their growth forecasts on the eve of Thursday’s BEA report.

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