The United States’ gross domestic product (GDP) shrank at an annualized rate of 1.4% in the first three months of 2022.
Experts attributed the declining growth rate last quarter, the worst since the pandemic began, to numerous factors from record inflation and the negative economic fallout from the highly-infectious omicron variant.
Economists had predicted an annualized growth rate of 1.1% between January and March.
CNN Business reports on the White House’s response:
Despite the lower numbers, President Joe Biden categorized the US economy as “resilient in the face of historic challenges,” in a statement released Thursday morning.
“While last quarter’s growth estimate was affected by technical factors, the United States confronts the challenges of Covid-19 around the world, Putin’s unprovoked invasion of Ukraine, and global inflation from a position of strength,” the statement said.
Meanwhile, CNBC has more on what drove the decline:
The decline in growth came due to a deceleration in private inventory investment, which helped propel growth in the back half of 2021. Other restraints came from exports and government spending across state, federal and local governments, as well as rising imports.
An 8.5% pullback in defense spending was a particular drag, knocking one-third of a percentage point off the final GDP reading.
While economists look at many factors to determine if a recession is likely and one quarter doesn’t mark a trend, a popular definition of a recession is two consecutive quarters of GDP decline.