May 20, 2022

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US economy shrinks in first quarter and fears of a recession mounting | Univision Money News

The The U.S. economy contracted in the first quarter of this year. Fears of a recession are rising amid inflation, a protracted corona virus infection and the global impact of the war in Ukraine.

The function of the world’s largest economy Contracted 1.4% in the first three months of the year On an annual basis, according to government figures released on Thursday. This is the most debilitating behavior since the shock of the outbreak in 2020. This is a significant departure from almost 7% growth at the end of last year.

The summary came as a surprise to economists who forecast 1% growth in the first quarter. But There is no talk of a recession yet. For this to happen, contractions must be recorded for several consecutive quarters. Also, some economists They expect the economy to accelerate its growth in the April-June quarter.

At the beginning of 2022, two factors weighed heavily on the economy: Private companies reduced their inventory and recorded a decline in exports.

“The decline in gross domestic product (GDP) reflects a reduction in investments in private goods, exports, federal and local government spending,” the government said.

However, Consumption momentum was strong and grew 0.7% during the period, Suggests a major recession point for the US economy. Sales to local buyers also showed opposition.

Possible recession and inflation, consumer concerns

This figure comes at a critical juncture for the US Federal Reserve (Fed).

These hikes are expected to slow the pace of inflation, but some economists fear it will slow economic activity as well.

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