U.S. household wealth fell for the first time in two years, the Federal Reserve said Thursday, as the American economy continues to face turbulence.

The Fed blamed stock market declines, which it said eclipsed a smaller rise in home values. Stocks fell by $3 trillion in the current quarter, while real estate values climbed $1.7 trillion.

Total household net worth fell from $149.8 trillion at the end of 2021 to $149.3 trillion, the Fed said. It was the first decline since the onset of the COVID-19 pandemic in the first quarter of 2020.

The Fed said household balance sheets remain strong, but the effects of rising inflation are unclear.

Inflation, which is at a 40-year high, has continued to push down the value of equities, suggesting household wealth will continue to erode.

Overall economic growth is also likely to face headwinds as the Fed raises interest rates to counter inflation.

The American GDP shrank by 1.5% in the first quarter. (VOA)

•PHOTO FILE- U.S. household income fell for the first time in two years, mostly due to declines in the stock market. This June 13, 2018, photo shows U.S. currency.