The US economy unexpectedly shrank 1.4% in the first three months of 2022 compared with a year ago, the government reported on Thursday, raising fears that the world’s largest economy could face a recession.
After more than a year of rapid growth as the United States recovered from the initial ravages of the coronavirus, the US economy was hit in the January-March period by the fastest rise in consumer prices in four decades, the new wave of cases of variants of coronavirus omicron and the russian invasion from Ukraine.
The slowdown is the first since the coronavirus recession ended in April 2020, a period in which millions of workers were laid off and many businesses closed their doors or drastically reduced operations.
However, most economists in the US believe the US economy is resilient and project it could resume modest growth in the April-June period, although some analysts suggest a recession cannot be ruled out if two consecutive quarters emerge. of a shrinking economy.
Even so, hundreds of thousands of jobs they are routinely added to the economy month after month and March’s 3.6% jobless rate was just one indicator above the 3.5%, 50-year low recorded just before the debilitating pandemic hit the country.
But the first-quarter decline reported by the Bureau of Economic Analysis contrasted sharply with the 5.7% growth reported for last year, the fastest annual advance since 1984 and the 6.9% annualized growth rate in the fourth quarter of last year.
Economic analysts said the first-quarter drop was caused in part by a widening trade deficit, meaning the United States imported far more goods than it exported.
Companies quickly built up their inventories in the latter part of 2021, but slowed the pace in early 2022. Government aid to combat the effects of the coronavirus and boost the economy has also largely ended.
While job growth has been robust and the unemployment rate has steadily declined, most American consumers are concerned about inflation, especially with higher food costs and gas prices at gas stations pinch family budgets. Year after year, consumer prices rose 8.5% in Marcha maximum of 40 years.
The authorities of the country’s central bank, the Federal Reserve, have embarked on what they have indicated will be a series of increases in the coming months in their reference interest rate to control inflation.
The expectation is that the Fed’s interest rate hike will increase borrowing costs for both businesses and consumers, cooling the economy from growing too quickly.
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