Washington DC – Economic growth in the United States (US) declined at an annual rate of 1.4% during the first quarter of 2022. It was the lowest economic growth quarter for the US since the pandemic era.
However, economists are still optimistic that the decline is not a cause for panic or a sign of a recession. Economists call the decline in the US economy due to various factors, especially the large trade deficit due to supply disruptions to the country.
Personal consumption expenditures climbed at a 2.7 percent annual pace in Q4-2021, compared to 2.5 percent in Q4-2021. Business investment surged at a 9.2% annualized rate in Q1-2022, up from 2.9% during the fourth quarter.
While the GDP report is no reason to panic about the economy at the moment, there are huge risks in sight that are very influential. As a result, a recession in 2023 or 2024 is a distinct probability.
The biggest problem in question, inflation is currently very high. Inflationary pressures have serious repercussions for the economy, one of which was the source of the reason the Federal Reserve raised interest rates for the first time since 2000. This means that borrowing costs for mortgages, credit card and auto loans will increase.