US Q1 Growth Rate Falls to -1.5%, Down 0.1%p from Preliminary Estimate

Expecting Positive Growth Turnaround in Q2

[Asia Economy Reporter Kim Heeyoon] The United States' first-quarter Gross Domestic Product (GDP) growth rate was reported to have significantly declined to -1.5% compared to 6.9% in the fourth quarter of last year.

On the 26th (local time), the U.S. Department of Commerce announced that the GDP growth rate for the first quarter of this year, from January to April, decreased by 1.5% quarter-on-quarter. This figure fell short of the expected 1.3%. While the U.S. economy recorded a growth rate of 6.9% in the fourth quarter of last year, surpassing market expectations, it contracted more than anticipated in just one quarter.

The growth rate was dragged down by a decrease in net exports, which is total exports minus total imports. Exports in the first quarter fell by 5.4% compared to the previous quarter, whereas imports increased by 13.6%. This is analyzed as a result of a significant rise in import values due to raw material price increases and inflation, while exports declined due to economic slowdowns in various countries.

Personal consumption, which supports the U.S. economy, increased by 3.1% in the first quarter. This is attributed to the recent easing of COVID-19 spread and the rapid recovery of the employment market. Private investment, another component of GDP, was recorded to have increased by 0.5%.

Global market research firm IHS forecasted that the U.S. growth rate for the second quarter will be 2% (annualized), despite the impact of the Russia-Ukraine war.

The U.S. GDP growth rate is announced three times: as a preliminary estimate, a provisional estimate, and a final estimate. The announcement on this day was the provisional estimate and may be revised in the future.