The U.S. economy contracted at a slightly slower rate than estimated during the second quarter.
According to updated data released by the Bureau of Economic Analysis on Thursday, the GDP shrank at a 0.6% annualized rate last quarter. The activity was revised upward from the advanced estimate released in July, which showed a 0.9% decline.
Based on the upward revision the U.S. economy is contracting for two consecutive quarters, which meets the standard definition of a technical recession.
However, many economists don’t believe the U.S. is in the midst of a recession given the strong labor market and a greater spending from both consumer and business.
A separate report from the Labor Department on Thursday showed initial claims for state unemployment benefits fell 2,000 to a seasonally adjusted 243,000 for the week ended Aug. 20.
The jobless rate fell to a pre-pandemic low of 3.5% in July from 3.6% in June. There were 10.7 million job openings at the end of June, with 1.8 openings for every unemployed worker.
The risk of a recession however is not over since the Federal Reserve is moving fast to tame inflation. The Central Bank has hiked its policy rate 225 basis points since March and it is expected to keep rising rates.