Economy SHRANK When It Was Expected To Grow

(The Center Square) – The U.S. Gross Domestic Product, a key measure of the size of the economy, declined in the first three months of 2022, latest federal economic data show, surprising experts and raising concerns about the state of the economy.

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The Bureau of Economic Analysis reported Thursday that the economy shrank by 1.4%, despite predictions that it would grow by 1%. In 2021, the economy grew nearly 6%, a bounce-back year after the economic pains of COVID-19 shutdowns.

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“The decrease in real GDP reflected decreases in private inventory investment, exports, federal government spending, and state and local government spending, while imports, which are a subtraction in the calculation of GDP, increased,” the BEA said. “Personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed investment increased.”

Critics were quick to blast President Joe Biden, who has taken fire for hiking federal spending, which has helped fuel soaring inflation.

“Hello, stagflation,” said Monica Crowley, former U.S. Assistant Secretary of the Treasury for Public Affairs. “Biden and the Dems are driving the economy off a cliff.”

Others urged Americans not to panic, saying the report was not as bad as it seemed.

“Don’t freak out about the GDP report, the underlying inertial components were strong,” said Jason Furman, an economics professor at Harvard. “The headline was -1.4% growth at an annual rate. bit, inventories subtracted 0.8pp and net exports subtracted 3.2pp. Consumption, fixed investment, and key domestic demand components strong.”

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