The U.S. economy shrank at an annualized pace of 1.6% in the first quarter. The Bureau of Economic Analysis’s third and final estimate of first-quarter GDP released Wednesday, June 29, showed a 1.6% annualized drop in economic growth in the first quarter of 2022. That was slightly worse than the 1.5% decline previously reported. Economists surveyed by Bloomberg had expected the rate of contraction to stay steady at 1.5%.
The decline in the first quarter marked the first drop in GDP since the second quarter of 2020, when the Pandemic hit the global economy. In the fourth quarter of 2021, real GDP increased 6.9%.
The biggest change in this revision was a markdown in growth of personal consumption expenditures (PCE) to just 1.8% growth from the previously reported 3.1% increase.
This bad news on GDP growth and personal consumption comes after Tuesday’s big drop in consumer confidence to a 13-year low.
