The US economy contracted more than expected in the first quarter, according to official data released Thursday. The figure comes amid fears of a recession in the world’s largest economy, and a day after the release of the Federal Reserve’s meeting minutes.
Quarterly GDP contracted 1.5%, higher than the 1.3% analysts had expected.
This is the second revision to the quarterly GDP, which is lower than expected a few weeks ago, which was a quarterly decline of 1.4%. This is explained by the downward revision of private investment in inventories and housing investment in the US, which was partially offset by the upward revision of consumer spending.
Other factors that could have affected the quarterly decline were the rise in coronavirus cases, problems in the supply chain, as well as high inflation affecting the United States, which led to the Federal Reserve raising interest rates.
In fact, in the minutes published on Wednesday, many Fed members saw fit to raise interest rates by 50 basis points at the June and July meetings, to contain inflationary pressures.
The third revision of the quarterly GDP is still missing and will be released at the end of June.
