The U.S. economy unexpectedly contracted in the first quarter, shrinking 1.4 percent. Another three months of negative growth in the output of goods and services could send the world’s largest economy into a technical recession.
Although recession clouds could be forming on the horizon, some market analysts dismissed the headline GDP reading in the January-to-March period, citing strong domestic demand. Consumer spending expanded 2.7 percent, residential investment increased 2.1 percent, and non-residential investment swelled 9.2 percent. The negative growth was driven primarily by a decline in exports, inventory rundowns, and a drop in government spending.
Still, financial experts concede that it was not a good quarter for the post-pandemic economy, with rampant price inflation in nearly every sector. The data and trends have weighed on projections, too.
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