Friday, April 29, 2022

GDP fell 0.4% in the first quarter of 2022

Via the New York Times: 

The U.S. economy contracted in the first three months of the year, as supply constraints at home, demand shortfalls abroad and rapid inflation worldwide weighed on an otherwise resilient recovery.

Gross domestic product, adjusted for inflation, fell 0.4 percent in the first quarter, the Commerce Department said Thursday. It was the first decline since the early days of the pandemic, and a sharp reversal from the rapid 1.7 percent growth in the final three months of 2021.

But the negative number masked evidence of a recovery that economists said remained fundamentally strong. The decline — 1.4 percent on an annualized basis — mostly resulted from the way inventories and trade figure in the calculation, as well as reduced government spending as Covid-19 relief efforts wind down. Measures of underlying demand showed solid growth.

Most important, consumer spending, the engine of the U.S. economy, grew 0.7 percent in the first quarter despite soaring gas prices and the Omicron wave of the coronavirus, which restrained spending on restaurants, travel and similar services in January... 

Most of the economics commentators on Twitter seem to think this is no big deal, and I don't have any data to contradict them. But I certainly think this bears watching...

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looks like Blogger doesn't work with anonymous comments from Chrome browsers at the moment - works in Microsoft Edge, or from Chrome with a Blogger account - sorry! CJ 3/21/20