US economy shrinks 0.9% for the second quarter in a row

The US economy shrank for the second quarter in a row between April and June, fueling recession fears just months before pivotal midterm elections.

The second quarter’s GDP fell at an annual rate of 0.9 percent, following a larger drop in the first three months of the year.

The report noted decreases in all levels of government spending as well as private investment in goods, including automobiles, and residential construction.

Many economists believe the recession debate is more about when, not if. This is a major political headache for President Obama, whose approval ratings have plummeted.

It would be extremely unusual for an economy that is still adding jobs at a rapid pace to enter a recession.

On Wednesday, the Federal Reserve raised interest rates by 75 basis points.