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U.S. GDP Drops 1.4%

the staff of the Ridgewood blog

Ridgewood NJ, according to the Bureau of Economic Analysis (BEA) the U.S. GDP shrank at an annualized rate of 1.4 percent during the first three months of 2022, according to the BEA’s first estimate of first-quarter economic growth. Economists expected U.S. GDP to have fallen by an annualized rate of 1 percent. Marking an abrupt reversal for an economy coming off its best performance since 1984.

The negative growth rate missed even the subdued Dow Jones estimate of a 1% gain for the quarter. GDP measures the output of goods and services in the U.S. for the three-month period.

Consumer spending and overall consumption remained strong through the start of the year, a positive sign for the U.S. economy as it faces headwinds from inflation and pandemic-related supply shocks. But a high level of imports—which subtract from GDP—along with the expiration of pandemic aid programs, declines in government spending and a drop in exports pushed the economy slightly backward on the whole.

Prices increased sharply during the quarter, with the price index for gross domestic purchases surging 7.8% in the three-month period, following a 7% gain in the fourth quarter of 2021.

The decline in economic growth comes amid growing concerns the U.S. could fall into a recession as the Federal Reserve races to fight inflation with a series of interest rate hikes.

2 thoughts on “U.S. GDP Drops 1.4%

  1. FJB LGB

  2. Thanks Uncle Brandon

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