The US economy grew at an annual rate of 0.5% in the first quarter of this year, pulled back by slowing consumption, the commerce department said on Thursday.

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The economy settled into the slow lane last quarter, as consumers took their foot off the gas and businesses grew more cautious as well, the New York times reported. The growth rate in the first three months of 2016 continued a downshift that began late last year.

It reinforced what has become something of an annual economic rite in recent years -- a weak first quarter, followed by optimistic predictions that a rebound was just around the corner. In 2015, the economy finished the year with a growth rate of 1.4% in the fourth quarter.

The optimists may be right that growth will pick up for the rest of 2016 as it did last year, but the trajectory of the economic recovery remains frustratingly uneven, nearly seven years after it began. Over all, the growth has been lackluster. The growth in the first quarter was the slowest quarterly rate of expansion in two years.

Even as the pace of expansion has slowed in the last two quarters, the economy has added an average of nearly 245,000 jobs a month over the same period, a healthy showing by just about any standard. 

Recession fears, which dominated the headlines and fixated traders on Wall Street three months ago, have largely faded. Volatility in Europe and Asian markets has also eased. Meanwhile, in the US, new claims for unemployment are running at the lowest pace since 1973, and after years of stagnation, wages are showing signs of life. 

On Wednesday, Federal Reserve policy-makers put off any move to raise interest rates, but in a statement after the meeting, they acknowledged cross-currents in the economy.