The US economy contracted by 1.4% in the most recent quarter, shrinking for the first time since the pandemic-induced recession two years ago as inflation continues to surge, according to government data released on Thursday.

The Commerce Department’s estimate Thursday of the first quarter’s gross domestic product — the nation’s total output of goods and services — fell far below the 6.9% annual growth in the fourth quarter of 2021.

The economy grew 5.7% last year — the highest calendar-year growth since 1984.

The latest figures are stoking concerns that the US is on the verge of a recession, even though other metrics, such as the job market and consumer spending, continue to be robust.

“Today’s shock drop in GDP is a wake-up call that the economy isn’t as strong as we all thought,” said Chris Zaccarelli, chief investment officer for Charlotte-based Independent Advisor Alliance.

“It’s possible that GDP gets revised higher next month, as this is just the first release and there will be two revisions, but it is a warning sign.”

Businesses and consumers increased their spending at a 3.7% annual rate after adjusting for inflation. Meanwhile, unemployment is at 3.6% — which is close to the pre-pandemic record lows.

Seasonally adjusted new jobless claims declined from the previous week to 180,000 — which is slightly above the more than 50-year low of 166,000 last month. Layoffs have reached historically low levels as employers, plagued by labor shortages, have held tightly onto their workers.

Wages are rising steadily as companies compete to attract and retain workers, a trend that has helped maintain consumers’ ability to spend.

But inflation is squeezing households as gas and food prices spike, borrowing costs mount and the global economy is rattled by Russia’s invasion of Ukraine and China’s COVID lockdowns.

The surge in consumer spending has helped fuel inflation, which reached 8.5% in March compared with 12 months earlier.

Fed Chair Jerome Powell has signaled a rapid series of rate increases to combat higher prices. The Fed is set to raise its key short-term rate by a half-percentage point next week, the first hike that large since 2000.

At least two more half-point increases — twice the more typical quarter-point hike — are expected at subsequent Fed meetings. They would amount to one of the fastest series of Fed rate hikes in decades.

Other analysts are nonetheless optimistic despite the underwhelming GDP numbers.

“This contraction is seen as less worrisome because it reflects a widening trade deficit and big swings in inventories along with a decline in government spending, said Mark Hamrick, a senior economic analyst for Bankrate.

“Key drivers including consumer and business spending have been holding up.”

Hamrick added: “Among the key questions for the balance of this year is whether inflation begins to weigh on the job market and the broader economy because consumers are pressured to cut back.”

With Post Wires