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US Economy Narrowed Down To 1.6% In First Quarter: Report

The Commerce Department, on Thursday, stated that the United States' (US) economy has fallen at an annual rate of 1.6 per cent in the first quarter

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The Commerce Department, on Thursday, stated that the United States' (US) economy has fallen at an annual rate of 1.6 per cent in the first quarter.

Earlier, it was estimated in late April that the Gross Domestic Product (GDP) of the country would be down 1.4 per cent.  Last month, they were revised and showed a decline of 1.5 per cent, reports Xinhua news agency.

The US GDP for the first quarter shows the US economy was in a recession for the first time since Covid-19 swept across the country.

The GDP decreased as a result of a decrease in exports, federal government spending, private inventory investment, state and local government spending, and imports, which are deducted  from the GDP.

The report notes that there is an increase in non-residential fixed investment, personal consumption expenditure (PCE), and residential fixed investment.

The Department Bureau of Economic Analysis (BEA) reported that there were still restrictions and destruction in some parts of the country due to an increase in Covid-19 cases associated with the Omicron variant during the first quarter.

The BEA indicates that government assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits have decreased due to the expiration or reduced funding of several federal programs.

The US economy may be heading into a recession with inflation at a four-decade high. According to economists, hawkish monetary policy could trigger a recession.

Fed Chair Jerome Powell said that this is certainly possible, but it was not their desired outcome.




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united states economy