US real GDP decreased at annual rate of 1.4% in Q1 2022: BEA

In the fourth quarter of 2021, GDP increased 14.5 per cent, or by $800.5 billion.

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. Personal consumption expenditures (PCE), non-residential fixed investment and residential fixed investment increased, according to a BEA release.

The decrease in private inventory investment was led by decreases in wholesale trade (mainly motor vehicles) and retail trade (notably, ‘other’ retailers and motor vehicle dealers).

Within exports, widespread decreases in non-durable goods were partly offset by an increase in ‘other’ business services (mainly financial services).

The decrease in federal government spending primarily reflected a decrease in defense spending on intermediate goods and services. The increase in imports was led by increases in durable goods (notably, non-food and non-automotive consumer goods).

The increase in PCE reflected an increase in services (led by health care) that was partly offset by a decrease in goods. Within goods, a decrease in non-durable goods (led by gasoline and other energy goods) was partly offset by an increase in durable goods (led by motor vehicles and parts).

The increase in non-residential fixed investment reflected increases in equipment and intellectual property products.

The price index for gross domestic purchases increased by 7.8 per cent in the first quarter, compared with an increase of 7 per cent in the fourth quarter. The PCE price index increased by 7 per cent, compared with an increase of 6.4 per cent.

Excluding food and energy prices, the PCE price index increased by 5.2 per cent compared with an increase of 5 per cent.

Current-dollar personal income increased by $268 billion in the first quarter, compared with an increase of $123.9 billion in the fourth quarter of last year. The increase primarily reflected an increase in compensation that was partly offset by a decrease in government social benefits.

In the first quarter this year, government assistance payments in the form of social benefits to households decreased as provisions of several federal programmes expired or continued to taper off.

Fibre2Fashion News Desk (DS)