US economy shrinks for a second quarter, fuelling recession fears

The US economy shrank for a second straight quarter, raising chances of a recession, as decades-high inflation undercut consumer spending and Federal Reserve interest-rate hikes stymied business investment and housing demand.

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 median projection in a Bloomberg survey of economists called for a 0.4% advance in GDP and a 1.2% rise in consumer spending.

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