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The U.S. economy shrank at an annual rate of 1.5 percent in the first quarter of the year amid the Omicron surge and elevated inflation, slightly worse than initial estimates of a 1.4 percent decline, the U.S. Commerce Department reported Thursday.
According to the Bureau of Economic Analysis, real gross domestic product (GDP) decreased at an annual rate of 1.5 percent in the first three months of 2022.
The slump 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, said the report.
In addition, personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed investment increased, said the report.
According to the U.S. Labor Department, the U.S. consumer inflation in April surged by 8.3 percent from a year ago, marking the second straight month of inflation of over 8 percent.
The inflation is expected to create more pressure on lower-income households, as Americans' wages, for the most part, have not kept pace with the inflation.
Analysts have projected that the U.S. economy will face slower growth and higher inflation at year-end, showed a survey released on Monday by the National Association for Business Economics.
The lower growth forecast occurs against the backdrop of the rising geopolitical uncertainty, surging inflation in the country and a more volatile global market. MS Television reports