U.S. economy unexpectedly fell by 1.4% in the Q1 amid a revival in COVID-19 cases

Posted on May 11, 2022   |  

• It is the first decrease in the gross domestic product in two years driven by a wider trade deficit as imports surged, and a slowdown in the pace of inventory accumulation.
• Imports surge amid front-loading by businesses over fears of shortages due to the Russo-Ukraine War and at the same time, exports plunged which led to a sharp widening of the trade deficit, which subtracted 3.20% points from GDP growth. 
• Consumer spending accounts for more than two-thirds of U.S. economic activity and grew up to a rate of 2.7% from the Q4’s 2.5% pace, despite taking a hit from the winter wave of coronavirus cases.