The US economy contracted at a slightly faster rate than previously expected during the first quarter, the Bureau of Economic Analysis said on Wednesday, declining 1.6% against expectations of a 1.5% contraction, according to CNN.
The data adds to fears that a recession may loom with a quarter of negative economic growth on record. Real GDP declined at an annual rate of 1.6 percent from January to March, according to the BEA’s third and final reviews for the quarter.
Previously, the advance estimate released in April showed the US economy contracting by 1.4%. Last month, that was revised down to 1.5%.
The first-quarter GDP performance, which the FBI indicated included some unquantified impacts from the pandemic and the variable rise in Omicron, in contrast to the fourth quarter of 2021, when the economy grew 6.9% from the previous quarter.
However, the first quarter of 2022 marked the beginning of the Russian invasion of Ukraine, which sent economic waves throughout the global supply chain, as well as the food, finance and energy markets. Inflation in the United States has risen to levels not seen in decades amid ongoing supply chain challenges, rising costs of goods and labor and higher oil prices.
While a recession is generally defined as a decline in two consecutive quarters of GDP, this is not a hard and fast rule, especially for people who make the official decision. The National Bureau of Economic Research, the arbiter of US recessions, considers a set of indicators.
In addition to GDP performance, a recession is defined as “a significant decline in economic activity that spreads through the economy and lasts more than a few months.” An advance estimate of GDP performance for the second quarter is due on July 28.