Economic Buzz: U.S. Real GDP Contracts By 1.4% In Q1 Of 2022

29 Apr 2022 , 09:02 AM

U.S. economic activity unexpectedly contracted in the first quarter of 2022. The real gross domestic product declined by 1.4 percent in the first quarter after spiking by 6.9 percent in the fourth quarter of 2021. The unexpected drop in GDP reflected decreases in private inventory investment, exports, and government spending along with an increase in imports, which are a subtraction in the calculation of GDP. Meanwhile, the unexpected decrease in GDP was partly offset by a 2.7 percent jump in consumer spending as well as increases in non-residential fixed investment and residential fixed investment. On the inflation front, the annual rate of growth in core consumer prices, which exclude food and energy, accelerated to 5.2 percent in the first quarter from 4.6 percent in the fourth quarter, reaching the highest level since 1983.

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