US gross domestic product declined 1.4% in the first quarter of 2022 year-on-year, compared to the fourth quarter of 2021, according to a first estimate from the Bureau of Economic Analysis (BEA), a body linked to the country’s Commerce Department released Thursday ( 28).
It’s the first drop in US quarterly GDP since the second quarter of 2020, at the start of the pandemic, and the result came in well below the Refinitiv consensus, which was up 1.1%. In the fourth quarter, US GDP grew 6.9%also on annual terms.
According to the BEA, “In the first quarter there was a re-emergence of micron-variable Covid-19 cases and a decrease in government aid payments from the pandemic.” “The increase in Covid-19 cases related to the Ômicron variant has led to continued restrictions and disruptions to the operations of institutions in some parts of the country.”
The bureau also said that the decline in GDP “reflected a decline in private investment in inventories, in exports, in federal government spending, and in government spending at the state and municipal levels, while imports (which are a subtraction in the calculation of GDP) increased.”
The authority also highlighted the increase in personal consumption expenses, non-residential fixed investment, and fixed residential investment during the quarter.
Check below the variance of US GDP from 2018 to 2022:
US GDP methodology
The BEA notes that the first estimate of GDP, released today, is “based on incomplete source data or subject to further review”. A second estimate of the index, based on more complete data, will be released on May 26.
The methodology used by the BEA to calculate GDP growth on an annual basis, differs from that used by other countries in the world. The American method is to calculate the quarterly change with annual seasonal adjustment, and the resulting change is raised to the fourth power.
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