A recession is typically considered two consecutive quarters of negative GDP growth.
U.S. economic activity contracted for the first time since mid-2020, with lingering supply chain constraints, inflation at its hottest rate since the early 1980s, expected interest rate increases announced by the Fed, and disruptions amid Russia’s war in Ukraine weighing on economic growth.
The Bureau of Economic Analysis (BEA) released its initial estimate of first-quarter U.S. gross domestic product (GDP).
The main metrics from the report, compared to consensus data compiled by Bloomberg, are:
- GDP annualized, quarter-over-quarter: -1.4% vs. 1.0% expected, 6.9% in Q4
- Personal Consumption: 2.7% vs. 3.5% expected, 2.5% in Q4
- Core Personal Consumption Expenditures, quarter-over-quarter: 5.2% vs. 5.5% expected, 5.0% in Q4
What does the metrics all mean?
The economic metrics are important indicators of the state of the U.S. economy at the start of this calendar year — especially now as the U.S. braces for interest rate hikes to cool inflation and for the possibility of a recession in the near to medium term. A recession is typically considered two consecutive quarters of negative GDP growth.
“It is unfortunate that this GDP rate did not meet expectations, but unsurprising as the U.S. economy remains very volatile with geopolitical turbulence from the war in Ukraine, a global supply chain crisis, increasing inflation and the ongoing COVID-19 pandemic,” Steve Rick, chief economist at CUNA Mutual Group, said in an email. “All of these factors have shrunk GDP growth rates around the globe.”
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