The US is not in a recession. But we’re getting uncomfortably close.

The economy shrank for a second straight quarter, the Commerce Department said Thursday.

Homebuilding fell during the second quarter, contributing to an annualized 0.9 percent decline in gross domestic product.Philip Cheung/NYT

The Commerce Department said on Thursday that the economy shrank for a second straight quarter — a usually reliable indicator that a recession is underway.

But few things work like they used to in our COVID-warped world.

The economy is unquestionably slowing down, which is actually good news when it comes to reducing inflation. (More on this angle later.) Though we’re getting uncomfortably close to a recession, we’re not there yet, and there is solid data to back that up.

Let’s start with Thursday’s report on gross domestic product, the broadest measure of the economy. GDP declined an annualized 0.9 percent from April through June, after a 1.6 percent drop in the prior three months. The economy expanded by 5.7 percent in 2021.

(Massachusetts’ GDP fell 0.2 percent, local economists at MassBenchmarks said Thursday.)

But digging into the national report, we see that consumers, who power about two-thirds of the economy, increased spending in the second quarter, albeit at a reduced pace. US exports grew during the same period.

And the biggest factor behind the GDP shortfall was a drop in inventories — a volatile category that has gotten even more so as companies struggle with pandemic-induced shifts in supply and demand.

The strongest evidence that the economy isn’t down for the count is the labor market. Employers added an average of 397,000 jobs a month in the second quarter. That was down from the first quarter of the year but double the pace of the three years before COVID hit. The jobless rate held steady in June at 3.6 percent, near a 50-year low.

“This is a very strong labor market,” Federal Reserve chairman Jerome Powell said on Wednesday, after central bank policy makers raised interest rates for the fourth time this year. “It doesn’t make sense that the economy would be in recession with this kind of thing happening. So I don’t think the US economy is in recession right now.”

Other metrics support his view, including healthy household savings and income levels.

Most economists agree that it’s too early to add mid-2022 to the list of US recessions, and the official word will come from the National Bureau of Economic Research, which typically weighs in months after the fact.

As my colleague Jim Puzzanghera explained over the weekend, the Cambridge-based group defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.” It assesses a variety of factors beyond GDP, including personal income and spending, wholesale and retail sales, employment, and industrial production.

But the consensus of forecasters is that while a recession isn’t inevitable, it will be hard to avoid. The latest GDP data were full of warning flags: Business investment in factories and equipment fell, as did new home construction and government spending.

Spending by consumers rose a modest 1 percent on an annual basis, as they boosted outlays for services such as travel and restaurants by 4.1 percent while cutting back on purchases of goods. The shift back to services caught many companies flat-footed and sitting on too much inventory. The decline in restocking cut 2 percentage points off GDP.

“Today’s report is further evidence that the US economy is quickly losing momentum and increases the likelihood that even the broadest definition of recession will be met before the end of the year,” said David Kelly, chief global strategist at JP Morgan Asset Management.

It is an irony of today’s economy that a slowdown is good news because it should lower the boil on inflation, a pernicious problem. In fact, the Fed is trying its best to choreograph a “soft landing” — gradually reining in growth in consumer prices without triggering an economic contraction.

The central bank has raised its benchmark federal funds rate by 2.25 percentage points since March. While that’s the most extreme hike since the early 1980s, the Fed was starting with rates near zero. Rates remain low compared with historical levels, but the Fed’s aggressiveness has been enough to cool off an overheated economy, including the housing market.

The concern now is that an economic fall will turn into winter. Wall Street has been acting like a recession is baked in.

After peaking at 3.5 percent in June, the yield on the 10-year Treasury note has fallen back to 2.7 percent, a move analysts attribute to investors’ belief that the Fed will scale back its rate hikes as the economy slips into a recession. Stocks, which tend to do better when interest rates are falling, have rallied since mid-June, with the Standard & Poor’s 500 index up more than 11 percent.

On Wednesday, the Fed’s Powell conceded that predicting what happens next — a soft landing or a hard one — is exceedingly difficult.

“The truth is . . . we think that demand is moderating. We do. How much is it moderating? We’re not sure. We’re going to have to watch the data carefully.”

I appreciate the honesty, though it’s hardly comforting to think that things are so topsy-turvy that the most powerful financial institution in the world is in the dark. Just like the rest of us.