(The Center Square) – U.S. gross domestic product fell 1.6% in first three months of 2022, latest federal economic report Data broadcast the Wednesday shows.
Earlier, the BEA said the economy shrank 1.5% before revising the figures.
“Real gross domestic product (GDP) shrank at an annual rate of 1.6% in the first quarter of 2022, according to the “third” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2021, real GDP grew by 6.9%,” the group said. “The ‘third’ GDP estimate released today is based on more complete source data than that available for the ‘second’ estimate released last month.
“The decline in real GDP reflects lower exports, federal government spending, private investment in inventory, and state and local government spending, while imports, which are a subtraction in the GDP calculation, fell. increased,” added the BEA. “Non-residential fixed investment, PCE and residential fixed investment increased…”
The BEA also confirmed what other federal data has shown: significant price increases.
“The gross domestic purchases price index rose 8.0% (revised) in the first quarter, compared to an increase of 7.0% in the fourth quarter…,” the BEA said. “The PCE price index rose 7.1% (revised), compared to an increase of 6.4%. Excluding food and energy prices, the PCE price index rose 5.2% (revised), compared to an increase of 5.0%.
According to the data, Americans have also seen their disposable income decline as well as their savings.
“Personal disposable income fell $58.8 billion (revised), or 1.3%, in the first quarter, compared with an increase of $72.4 billion, or 1.6%, in the fourth quarter” , said the BEA. “Real personal disposable income fell 7.8% (revised), compared to a decline of 4.5%. Personal savings were $1.02 trillion in the first quarter (revised), compared to $1.45 trillion in the fourth quarter. The personal savings rate – personal savings as a percentage of personal disposable income – was 5.6% (revised) in the first quarter, down from 7.9% in the fourth quarter.
This data is accompanied by a steady stream of federal inflation data that shows prices have soared in recent months. The federal producer price index has risen 10.8% over the past 12 months and consumer prices have risen at the fastest pace in four decades.
Meanwhile, gasoline prices hit record highs earlier this month, topping $5 a gallon before falling. According to AAA, the national average price for regular gasoline is $4.87 per gallon, well above the average price of $3.11 at the same time last year.
Critics blasted President Joe Biden after the GDP figures were released.
“Real GDP fell 1.6% and the Biden administration is still trying to say the economy is great,” U.S. Rep. Lisa McClain, R-Mich., wrote on Twitter.