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US Economy Unexpectedly Shrunk in First Quarter

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The US economy shrank 0.4 percent in the first quarter of 2022 compared to the previous three months. This is partly because the United States exported less, and government spending fell.

 

In addition, fewer cars were produced, which meant that company inventories grew less rapidly, resulting from the great scarcity of parts such as chips. Economists had generally expected an increase.

The US Department of Commerce reported a 1.4 percent contraction on an annualized basis, meaning the decline in the gross domestic product is imaginarily extending over four quarters. Government spending fell mainly in the field of defence. According to the Bureau of Economic Analysis (BEA), the trade deficit also widened, meaning the United States imported far more than it exported.

Households still let the money roll. Americans also put more money into renovating their homes and other major purchases.

Economists polled by the Bloomberg news agency expected 1 percent growth on an annualized basis. That would be 0.2 percent every quarter. In the fourth quarter of 2021, the US economy grew by 1.7 percent compared to the previous quarter.

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