The numbers were disclosed in this Thursday (12) by the Office of Economic Analysis of the Department of United States Commerce. The report noted that the decline in real GDP “reflected declines in private investment in inventories, exports, federal government spending and state and municipal government spending, while imports, which are a subtraction in the GDP calculation, increased. Personal consumption expenditures, non-residential fixed investment and residential fixed investment increased.”
Furthermore, government aid “in the form of forgivable loans to companies, transfers to state and local governments and social benefits to families have declined as provisions for various federal programs have expired or decreased.”
US President Joe Biden blamed “technical factors” for the poor GDP result and claimed the economy is expected to grow this year, citing high levels of consumer spending and investment from businesses and residential (construction or purchase of real estate to live in).
“The US economy, supported by working families, remains resilient in the face of historic challenges. The United States faces the challenges of Covid-04 across the world, the unprovoked invasion of Putin in Ukraine and global inflation from a position of strength”, he said, in a statement reproduced by the Financial Times.
The economy is Biden’s biggest challenge for the midterm legislative elections, which will be held in November. The United States has been accumulating record inflation rates, and in March the index reached 8.5%, the highest for a period of months since December 1981.
The Federal Reserve (FED), the central bank of the United States, announced in March an increase in the basic interest rate in the country by 0,25 percentage point, for the range from 0,25% to 0,25% per year, the first increase in the indicator in the country since 1280, and more readjustments are expected by economists. The next meeting of the FED committee will be next week.