US economy shrank 0.9% last quarter, its 2nd straight drop

WASHINGTON (AP) – The U.S. economy shrank from April through June for a second straight quarter, contracting at a 0.9% annual pace and raising fears that the nation may be approaching a recession.

The decline in the gross domestic product – the broadest gauge of the economy – followed a 1.6% annual drop from January through March.

Consecutive quarters of falling GDP constitute one informal, though not definitive, indicator of a recession.

The report comes at a critical time. Consumers and businesses have been struggling under the weight of punishing inflation and higher borrowing costs.

On Wednesday, the Federal Reserve raised its benchmark interest rate by a sizable three-quarters of a point for a second straight time.