America’s economy shrank in the first quarter of 2022, data from the Bureau of Economic Analysis showed Thursday.
The nation’s gross domestic product — the broadest measure of economic activity — declined at an annualized rate of 1.4% between January and March in an abrupt reversal of the prior year’s strong growth.
It was a marked slowdown from the 6.9% growth pace recorded in the final quarter of last year, and the worst performance since the pandemic recession in the second quarter of 2020. Economists had predicted an annualized growth rate of 1.1%, according to Refinitiv.
Much of the decline was due to a decrease in inventory investment, which had been booming in the final months of 2021.
Exports and government spending also fell, while imports rose. Consumer spending, which is vital to the economy, increased as prices kept rising.
The price index tracking personal consumption expenditure rose 7% in the first three months of the year, or 5.2% when stripping out energy and food prices.
A second estimate of first quarter GDP growth will be published at the end of May.
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