Consumers and businesses kept spending at a solid pace in the first three months of the year, but the economy shrank, the government reported Thursday. It revised downward its previous estimate for January-March.
Gross domestic product, a broad gauge of economic output, dropped in the fourth quarter of last year, but it does not signal a recession. A wider trade gap contributed to the contraction: The U.S. spent more on imports than other countries spent on U.S. exports. GDP was reduced by 3.2 percentage points as a result of the trade gap in the first quarter.
The Commerce Department estimated that the economy contracted at a 1.5% annual pace from January through March, a slight downward revision from its first estimate of 1.4%, which it issued last month. It was the first drop in GDP since the second quarter of 2020 — in the depths of the COVID-19 recession — and followed a robust 6.9% expansion in the final three months of 2021.
26 May 2022
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