U.S. Economy Shrank in First Quarter of 2022 After 2021 Expansion

U.S. Economy Shrank in First Quarter of 2022 After 2021 Expansion

The U.S. economy shrank in the first quarter of 2022, marking a contraction — for the first time since the pandemic recession hit two years ago — of a 1.4 percent annual rate.

The U.S. Department of Commerce’s Bureau of Economic Analysis released its latest "advance estimate" data on Thursday morning. 

“Steady spending suggested that the economy could keep expanding this year even though the Federal Reserve plans to raise rates aggressively to fight the inflation surge,” reported NBC. “The first quarter’s growth was hampered mainly by a slower restocking of goods in stores and warehouses and by a sharp drop in exports.”

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“Real gross domestic product (GDP) decreased at an annual rate of 1.4 percent in the first quarter of 2022, according to the ‘advance’ estimate released by the Bureau of Economic Analysis,” reported BEA. “In the fourth quarter, real GDP increased 6.9 percent.”

And for 2021 as a whole, the economy grew 5.7 percent, the highest calendar-year expansion since 1984.

“The GDP estimate released today is based on source data that are incomplete or subject to further revision by the source agency,” BEA continued. “The ‘second' estimate for the first quarter, based on more complete data, will be released on May 26, 2022.