The US economy shrank for a second time this year to levels that should be indicative of a technical recession.

Data released by the Commerce Department on Thursday showed the GDP fell by 0.9% on an annual basis in the second quarter, which represents a fall of 0.2% from the previous quarter.

But US President Joe Biden states otherwise, insisting that the US economy was "on the right path," despite two consecutive quarters of negative growth.

"It's no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation," Biden said after the growth data was released," he said following the release of the report. "But even as we face historic global challenges, we are on the right path and we will come through this transition stronger and more secure. Our job market remains historically strong," he added.

"Even as we face historic global challenges, we are on the right path and we will come through this transition stronger and more secure," he said.

Yesterday, it was announced that the US Fed hiked interest rates by 75 basis points or 0.75%. For the past few months, the Fed has aggressively hiked interest rates to try and lower rising prices, but its efforts did not materialize in May, with consumer prices hitting four-decade highs.

Biden said his next move to counter inflation involves pushing Congress to pass the CHIPS and Science act, which is intended to increase American productivity of semiconductors, as well as the Inflation Reduction act that "will reduce the deficit beyond the record-setting $1.7 trillion in deficit reduction we have already achieved this year, which will help fight inflation as well." 

"If enacted, this legislation will be historic, and I urge the Senate to move on this bill as soon as possible, and for the House to follow as well," he said in a statement issued yesterday. 

Read more: US before 'very narrow path' to avert recession: IMF