(updated with details)
by Lucia Mutikani
WASHINGTON, April 28 (Reuters) – The U.S. economy contracted unexpectedly in the first quarter due in part to the resurgence of the COVID-19 pandemic and trade imbalances, the first official estimate of the product on Thursday showed. raw interior.
US GDP fell 1.4% annualized over the January-March period, the Commerce Department said, after growing 6.9% in the last three months of 2021 and rising 1 .1% expected according to the Reuters consensus.
Estimates from economists surveyed ranged between a contraction of 1.4% and growth of 2.6%.
It is the first contraction for the world’s largest economy since the recession caused by the COVID-19 pandemic nearly two years ago.
The slowdown in the US economy is mainly explained by a larger deficit in the trade balance, which represents a negative contribution of 3.20 percentage points to the change in GDP, and by the slowdown in the build-up of business inventories .
Investment in inventories reduced GDP growth by 0.84 percentage points.
Despite the wave of COVID-19 cases this winter, consumer spending rose 2.7% at an annualized rate in the first quarter after +2.5% in the fourth quarter.
Soaring food and fuel prices do not appear to be affecting the behavior of consumers, who are benefiting from strong wage increases amid a tight labor market and excess savings accumulated during the pandemic.
The Federal Reserve (Fed), which meets its monetary policy committee on Wednesday, could raise interest rates by 50 basis points, as suggested by its chairman Jerome Powell.
The US central bank raised rates by 25 basis points in March to fight inflation, as consumer prices rose in March at their fastest pace in 40 years.
“The economy is still showing some strength but the contraction in GDP signals the start of more moderate growth this year and in 2023, largely in response to rising interest rates,” said economist Sal Guatieri. at BMO Capital Markets. “The Fed has little choice but to aggressively hike rates in May to channel inflation.”
At the same time, the Commerce Department announced a 5.2% increase in the so-called “core PCE” basic price index on an annual basis over January-March, while the consensus gave it to 5.4% after 5.0% .