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

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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