Highlights
“The labor market brought rare good news in the 2nd quarter of 2022, with the unemployment rate holding steady and the broader U-6 rate that includes discouraged and involuntary part-time workers reaching a record low.”
Summary
In the 2nd quarter of 2022, inflation was the focal point of the U.S. economic picture. Contrary to officials’ hopes that price pressures would be transitory, inflation proved to be persistent. Meanwhile, lowered private investment and government spending pulled real GDP into its second consecutive quarterly decline—a common informal recession hallmark.
Counteracting the stubborn inflationary pressures without tipping the economy into recession continued to be the central concern for the U.S. Supply chains were not yet operating smoothly, especially at shipping ports, and the Russian war on Ukraine continued to constrain oil supply as gasoline prices shattered former record highs in the U.S. The Federal Reserve has undertaken efforts to curb inflation with tightening monetary policy including a series of target interest rate increases and an end to a two-year quantitative easing campaign. The Fed established plans to tighten its nearly $9 trillion asset holdings by halting acquisitions and letting currently-held bonds mature.
The labor market brought rare good news in the 2nd quarter of 2022, with the unemployment rate holding steady and the broader U-6 rate that includes discouraged and involuntary part-time workers reaching a record low.
Amidst these challenges to economic recovery, Omicron subvariants spread, generating a sixth wave of COVID-19 cases in the U.S. The wave had not yet reached an apex as the 2nd quarter ended with a daily case count (as measured by the 7-day moving average) of 112,442, 86% below the prior quarter’s peak. Deaths per day, which lag cases by 2-3 weeks, largely declined throughout the 2nd quarter, trending up again in June to end the quarter at 367, much lower than any prior wave and 87% below the previous quarter’s peak.