Currents News Staff
America’s economy is unexpectedly shrinking. The nation’s Gross Domestic Product – a key measure of economic activity – declined in the first quarter of 2022, according to data from the Bureau of Economic Analysis released Thursday.
That means it’s the worst quarter for the American economy since the beginning of the global pandemic in 2020. The GDP declined at an annualized rate of 1.4 percent in the first three months of the year.
“So I think we’re, what you’re seeing is enormous growth in the country,” said President Joe Biden. “That was affected by everything from COVID and the COVID blockages that occurred along the way.”
So what’s driving the decline?
“The problem is I have to pay a lot more at the gas tank,” said Mark Zandi, the Moody’s Analytics Chief Economist, “and going to the grocery store, that’s what’s really bugging people with great reason.”
While consumer spending increased, inflation remained high with chart-topping gas prices in response to Russia’s war in Ukraine are also hitting Americans in their pockets.
“Most recently the global pandemic and Russia’s invasion of Ukraine underscore large economic shocks and disruptions that must be addressed,” said Janet Yellen, U.S. Treasury Secretary.
Two straight quarters of declining growth usually amount to recession, but experts say it’s no time to panic, at least for now.
“No one is predicting a recession now,” said the president. “They’re predicting, or some are predicting there may be a recession in 2023. I’m concerned about it.”