USA: Can President Biden Stop Rising Inflation?
5:45
(CNN) --
The US economy shrank during the first quarter of the year at a slightly higher rate than previously estimated, the Bureau of Economic Analysis (BEA) reported Wednesday.
With a quarter of negative economic growth on the records, the data adds to fears that a recession is looming.
ANALYSIS |
Not even the Fed is sure it can avoid a recession
Real gross domestic product (GDP) declined at an annualized rate of 1.6% from January to March, according to the BEA's third and final revision for the quarter.
Previously, the previous estimate published in April showed a contraction of 1.4%.
Last month it was revised to a 1.5% decline.
The behavior of GDP in the first quarter, which according to the BEA includes some unquantified effects of the pandemic and the omicron variant, contrasts with the fourth quarter of 2021, when the economy grew at a rate of 6.9% compared to the previous quarter .
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Biden says extraordinary progress has been made in the economy and that "it will be seen once global inflation starts to recede"
The first quarter of 2022, however, marked the start of the Russian invasion of Ukraine, which sent economic shocks through the entire global supply chain, as well as the food, financial and energy markets.
Domestically, US inflation soared to levels not seen in decades, amid continued supply chain challenges, rising raw material and labor costs, and the rise in oil prices.
Although a recession is commonly defined as two consecutive quarters of falling GDP, it's not an exact rule, especially for the folks making the official determination.
The National Bureau of Economic Research, the arbiter of recessions in the US, takes into account a series of indicators, in addition to the evolution of GDP, and defines a recession as a "significant decline in economic activity that extends throughout the economy and lasts more than a few months.
The advance estimate of the evolution of the GDP for the second quarter is scheduled for July 28.
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