Previously, the BEA said the economy shrank by 1.5% before revising the numbers.
“Real gross domestic product (GDP) decreased at an annual rate of 1.6 percent in the first quarter of 2022, according to the ‘third’ estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2021, real GDP increased 6.9 percent,” the group said. “The ‘third’ estimate of GDP released today is based on more complete source data than were available for the ‘second’ estimate issued last month.
“The decrease in real GDP reflected decreases in exports, federal government spending, private inventory investment, and state and local government spending, while imports, which are a subtraction in the calculation of GDP, increased,” BEA added. “Nonresidential fixed investment, PCE, and residential fixed investment increased…”
The BEA also confirmed what other federal data has shown: significant price increases.
“The price index for gross domestic purchases increased 8.0 percent (revised) in the first quarter, compared with an increase of 7.0 percent in the fourth quarter…” BEA said. “The PCE price index increased 7.1 percent (revised), compared with an increase of 6.4 percent. Excluding food and energy prices, the PCE price index increased 5.2 percent (revised), compared with an increase of 5.0 percent.”
According to the data, Americans also saw a decrease in their disposable income as well as their savings.
“Disposable personal income decreased $58.8 billion (revised), or 1.3 percent, in the first quarter, in contrast to an increase of $72.4 billion, or 1.6 percent, in the fourth quarter,” BEA said. “Real disposable personal income decreased 7.8 percent (revised), compared with a decrease of 4.5 percent. Personal saving was $1.02 trillion in the first quarter (revised), compared with $1.45 trillion in the fourth quarter. The personal saving rate – personal saving as a percentage of disposable personal income – was 5.6 percent (revised) in the first quarter, compared with 7.9 percent in the fourth quarter.”
This data comes alongside a steady stream of federal inflation data that shows prices have soared in recent months. The federal producer price index rose 10.8% in the previous 12 months and consumer prices have risen at the fastest pace in four decades.
Meanwhile, gas prices hit record highs earlier this month, topping $5 per gallon before dipping down. According to AAA, the national average price for regular gasoline is $4.87 per gallon, well over the average price of $3.11 at the same time last year.
Critics blasted President Joe Biden after the GDP numbers were released.
“Real GDP dropped 1.6% and the Biden Administration is still trying to say that the economy is great,” U.S. Rep. Lisa McClain, R-Mich., wrote on Twitter.