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Data points to slowing U.S. economy, possible recession

Updated:2023-04-29 17:24:29

  WASHINGTON, April 28 (Xinhua) -- The U.S. economy appears to be slowing, and could hit a recession this year, according to experts, economic indicators and major corporations.

  "It is very likely that the economy will be tipped into recession by mid-year," said Desmond Lachman, senior fellow at the American Enterprise Institute and a former official at the International Monetary Fund.

  GDP, which measures all goods and services produced in the United States, rose at a paltry 1.1 percent annualized pace in the year's first quarter, according to the Commerce Department.

  Such growth is considered weak, and the numbers missed economists' expectations of 2 percent growth.

  That marked a significant decline from last year's fourth quarter increase of 2.6 percent.

  The disappointing GDP report should "come as no surprise," considering that the Federal Reserve has been engaged in the most aggressive interest rate hiking cycle in the past 40 years, Lachman told Xinhua.

  The economy showed signs of wobbling even before the release of that data.

  U.S. retail sales dropped 1 percent in March amid consumer cutbacks on autos and other big-ticket purchases -- an indication that the economy is slowing. That came on the heels of a decline in the month prior.

  At the same time, weakening demand led to a decline in factory production last month.

  Major corporations' earnings also show signs of a slowing economy.

  U.S. trucking giant UPS earlier this week reported that revenue slipped 6 percent in the first quarter, compared with the same period last year.

  "In the first quarter, deceleration in U.S. retail sales resulted in lower volume than we anticipated," UPS' earning statement said.

  "Given current macro conditions, we expect volume to remain under pressure," the company said.

  Economists have been predicting a recession for over a year, with many forecasting a mild one. But some believe there's a risk of a sharper downturn.

  Current financial market "fragilities" might make any recession "more severe than the average postwar recession," Lachman said.

  Economists also warned that the recent crash of Silicon Valley Bank could harm mid-size banks and have a spillover effect on the broader economy. ■