US Economy Contracts for First Time in 6 Quarters... Q1 Growth Rate at -1.4%

Due to the impact of Russia's invasion of Ukraine and other factors, the U.S. economy recorded negative growth in the first quarter for the first time since the second quarter of 2020.

The U.S. Department of Commerce announced on the 28th (local time) that the first quarter's Gross Domestic Product (GDP) growth rate was -1.4% annualized. This ended six consecutive quarters of positive growth for the U.S. economy. In the previous quarter, the fourth quarter of last year, growth was 6.9%.

This is the first time negative growth has been recorded since the early stages of the COVID-19 pandemic in the first and second quarters of 2020.

The worsening inflation, caused by the surge in energy, raw materials, and food prices following the spread of the COVID-19 Omicron variant at the beginning of the year and the outbreak of the Ukraine war at the end of February, is analyzed to have hindered the U.S. economy.

However, since the U.S. has relatively low economic dependence on Russia and most indicators measuring economic soundness such as unemployment rate, household debt, and personal consumption expenditures are at very good levels, there are also forecasts that the economy can accelerate its recovery once the geopolitical crisis is resolved.

The International Monetary Fund (IMF) recently projected this year's economic growth rate for the U.S. at 3.7%, significantly ahead of Germany (2.1%), Japan (2.4%), and Korea (2.5%). The U.S. growth rate is announced three times: as a preliminary estimate, a provisional estimate, and a final estimate. The announcement on this day is the preliminary estimate and may be revised in the future.