U.S. economy, shrinking for second straight quarter, may already be in recession. Plus: a slew of insider-trading cases, plunging home sales, and more

Welcome to?This Week in Finance , your weekly roundup of the top news, conversations, and voices trending among financial professionals on LinkedIn. Click 'Subscribe' to be notified of each edition. This week:

U.S. economy contracts into 'technical recession'

The economy shrank for a second straight quarter , placing the U.S. in what is commonly but unofficially considered a recession. Gross domestic product fell at an annualized rate of 0.9% in the three months ended in June, the Commerce Department said, following a 1.6% contraction during the first quarter. While the labor market is the strongest it has been in about 70 years, with an unemployment rate of 3.6%, other areas of the economy are slowing in the face of high inflation and rising interest rates.

• A recession, or falling off of economic growth, is commonly defined by two consecutive quarters of shrinking gross domestic product. The actual call is made by the National Bureau of Economic Research, which considers additional factors.
• The pandemic recession of 2020 was the deepest and shortest on record.
• New jobless claims declined last week for the first time in a month , but remained close to the highest level since November.
• Here's what people are saying.
• Global economy stalling, IMF warns : The global economy may be facing one of its weakest years since 1970, and the International Monetary Fund says we could "soon be teetering on the edge of a global recession." The IMF lowered its projection for global gross domestic product growth in 2022 to 3.2% — almost half of last year's 6.1%. It also warned of looming stagflation, or the combination of slow growth and fast inflation, as the war in Ukraine, the pandemic, and high consumer prices weigh on economic expansion.

Fed: Third jumbo rate hike possible

After raising interest rates by three-quarters of a percentage point for the second time in as many months, Federal Reserve Chair Jerome Powell on Wednesday said he wouldn't rule out another “unusually large” rate increase at the central bank’s next meeting in September. The Fed, fighting the fastest inflation in more than 40 years, lifted its key lending rate to a target range of 2.25% to 2.5% as part of the most aggressive tightening since the 1980s. Still, the economy has contracted for two consecutive quarters and policy makers are striving to rein in consumer-price increases of 9.1% without tipping the U.S. into recession.

• Powell said following the Fed committee’s unanimous decision that, because of the strength of the labor market, he doesn’t believe the economy is in a recession.
• Here's what people are saying.

• U.S. financial optimism drops : Financial optimism in the U.S. has recently dropped to levels unseen since late 2020, according to LinkedIn’s Workforce Confidence Index.
• Inflation fears? Not for the rich : Wealthy Americans are continuing to borrow money like it's 2019. Morgan Stanley's and Bank of America's wealth management units reported double-digit loan growth for the second quarter, with clients putting up their investment portfolios to secure new loans and mortgages.

Ex-Goldman VP faces federal charges

A former banker with Goldman Sachs is facing insider trading charges, U.S. prosecutors announced. Brijesh Goel, a Goldman vice president who left the investment bank in 2021, is accused of giving a longtime friend and squash partner stock tips using coded language about the sport, Bloomberg reports . Goel also faces obstruction of justice charges related to the alleged scheme. Goldman Sachs says it is cooperating with authorities, calling the allegations "egregious and illegal." Goel has been placed on leave from his current position at investment firm Apollo Global Management.

• A total of nine people were charged in four unrelated insider-trading cases Monday. Among them is former U.S. Rep. Stephen Buyer of Indiana, who prosecutors say engaged in insider trading while acting as a consultant after leaving Congress.
• Here's what people are saying.

Pending home sales in U.S. plunge

Signed deals to buy a home dropped 20% in June compared to a year earlier, according to the National Association of Realtors . The skid in pending home sales coincided with a spike in mortgage rates, CNBC notes , and NAR's data was released ahead of the Fed's latest rate hike aimed at taming inflation. The drop in contract signings was nationwide, though the South and West saw the biggest tumbles. The National Association of Realtors now expects total sales to fall 13% this year, before rebounding next year. ?? Here's what people are saying.

• How low could Canadian home prices go? : Canada’s biggest bank says the country’s housing market is in for a “historic” correction. RBC forecasts prices could fall more than 12% from the market’s peak through early next year. If that happens, it would be a steeper drop than any of the four downturns of the past four decades. The Bank of Canada’s aggressive rate hiking to tackle inflation is seen as the key catalyst, pushing buyers to the sidelines. RBC expects the correction to be over by sometime in the first half of next year.

The latest from earnings season:

• A slowdown in Big Tech earnings
• Meta sees first-ever revenue drop
• Inflation squeezes Walmart profits
• Price hikes give Unilever a boost
• Customers still thirst for Coca-Cola
• Shopify misses earnings estimates
• Big Oil rakes in profit amid crises
• Shortages drive GM's profit 40% lower
• Ford drives home strong Q2 results
• Boeing profit falls amid delays
• Spotify sings a happy earnings tune
• No new customers for Comcast

Can London's stock market fight back?

The London Stock Exchange has been having a rough time of late. The UK share of European IPO activity has been shrinking since the Brexit vote in 2016, and many of the most innovative companies continue to look to New York when they go public. Mark Austin, a partner at law firm Freshfields Bruckhaus Deringer, has been tasked with shaking things up on the 220-year-old market, while LSE CEO Julia Hoggett is optimistic that Cambridge chip designer Arm will list some of its shares on the exchange in its upcoming IPO . ?? Here's what people are saying.

No slowdown for African VC activity

Startups in Africa raised more in the first half of the year than in the same period last year, according to new collated data, making the continent the only part of the world where such investment is still growing. The Economist reports that in 2021, more than 600 African startups raised a total of $5.2 billion, with five of Africa’s seven unicorns notching their billion-dollar valuations in that period. The nascent VC industry in Africa must still generate returns to tempt a wider pool of investors. ?? Here's what people are saying.

Gen Z saving for retirement at impressive rate

Gen Z just entered the workforce, and they're already making saving for retirement a priority. In fact, young people are saving more than older generations. People in the U.S. aged 18 to 25 are putting aside an average of 14% of their income for retirement, according to BlackRock , compared with 12% saved by millennials, Gen Xers, and baby boomers. Younger people may be more money-conscious after growing up hearing that they can’t rely on Social Security and watching their parents get through recessions, CNBC reports . ?? Here's what people are saying.

With Cate Chapman , McKenna Moore ,?Harriet Sinclair ,?Saundra Latham , Jake Perez , Jessy Bains ,?Theunis Bates , Sam Shead , Winifred Okocha , and Ruiqi Chen .

What's your take on the week's news and other developments impacting you or your business? Join the conversation in the comments below.