US economy shrinks for a second quarter, fueling recession fears

Surging inflation, rising rates, and continued supply chain snags to blame

Photo: Reuters
Premium

Jerome Powell-led Federal Reserve’s interest rate hikes may have stymied businesses and housing.

Reade Pickert | Bloomberg
The drumbeat of recession grew louder after the US economy shrank for a second straight quarter, as decades-high inflation undercut consumer spending and Federal Reserve interest-rate hikes stymied businesses and housing.

Gross domestic product fell at a 0.9% annualized rate after a 1.6% decline in the first three months of the year, the Commerce Department’s preliminary estimate showed Thursday. Personal consumption, the biggest part of the economy, rose at a 1% pace, a deceleration from the prior period.

“The more important point is that the economy has quickly lost steam in the face of four-decade high inflation, rapidly rising borrowing costs, and

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Jul 28 2022 | 11:30 PM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on business-standard.com are available only to BS Premium subscribers.

Register to read more on Business-Standard.com