The US economy shrank 1.6% in the first quarter, adding to recession fears

The Bureau of Economic Analysis reported on Wednesday that the US economy declined during the first quarter at a somewhat quicker rate than anticipated.

The report increases concerns that a recession may be approaching after one quarter of negative economic growth.

The BEA's third and final adjustments for the quarter show that real gross domestic product fell at an annualized pace of 1.6 percent from January to March.

Prior to this, the April advance estimate revealed a decrease of 1.4 percent. That was changed to a decline of 1.5% last month.

The BEA observed that the pandemic's unmeasured consequences are present in the first quarter GDP performance.

The fourth quarter of 2021 saw the economy grow at a rate of 6.9 percent over the previous quarter, in contrast to the Omicron version increase.

Due to continued supply chain issues, rising labor and material costs, and surging oil prices, domestic US inflation has reached levels unseen in decades.

Although two consecutive quarters of declining GDP is a conventional definition of a recession, this is not a hard-and-fast rule, especially for those who make the official assessment.