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U.S. GDP shrinks by 1.6% in first quarter of 2022
Updated 12:27, 30-Jun-2022
CGTN
People shop at a grocery store in New York City, New York, U.S., June 10, 2022. /CFP

People shop at a grocery store in New York City, New York, U.S., June 10, 2022. /CFP

The U.S. economy shrank at an annual pace of 1.6 percent in the first three months of the year, the government reported Wednesday, in a slight downgrade from its previous estimate for January-March quarter.

It was the first drop in gross domestic product (GDP) – the broadest measure of economic output – since the second quarter of 2020, in the depths of the COVID-19 recession, and followed a strong 6.9 percent expansion in the final three months of 2021. Inflation is running at 40-year highs, and consumer confidence is sinking.

Last month, the Commerce Department had pegged first-quarter GDP growth at 1.5 percent. But on its third and final estimate Wednesday the department said consumer spending – which accounts for about two-thirds of economic output – was substantially weaker than it had calculated earlier, growing at a 1.8 percent annual pace instead of the 3.1 percent it estimated in May.

That was partly offset by a revision to its calculation of business inventories. The Commerce Department said that reduced restocking of company shelves had shaved less than 0.4 percentage points from first-quarter growth, down from the 1.1 percentage point hit it estimated in May.

(With input from AP)

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