US Economy Contracts for First Time in Two Years

Source: Bureau of Economic Analysis

The United States’ economy opened the year in a negative note, marking the first contraction since the COVID-19 pandemic hit. QQQ is up 0.49%, while SPY is up 0.24%.

• The real gross domestic product (GDP) contracted by 1.4% in the first quarter of 2022, following six straight quarters of expansion.
• The last contraction of the US economy was seen in the first and second quarters of 2020 when the COVID-19 pandemic hit.
• The contraction was attributed to drops in private inventory investment, exports, government spending, and higher imports.
• Increases were recorded in personal spending, nonresidential fixed investment, and residential fixed investment.
• The current-dollar GDP jumped 6.5%, or $379.9 billion, to $24.38 trillion, while the PCE price index grew by 7.0% versus the 6.4% in the previous quarter.
• Personal savings for the period fell to $1.21 trillion from $1.39 trillion in the last quarter of 2021, with the personal saving rate down to 6.6% from 7.7%.