The US economy shrank in the first quarter
The nation’s gross domestic product — the broadest measure of economic activity — declined at an annualized rate of 1.4% between January and March in an abrupt reversal of the prior year’s strong growth.
While one quarter does not yet make a trend, it is a warning sign for how the recovery is going: Two straight quarters of declining growth meet a commonly used definition of a recession.
Much of the decline was due to a decrease in inventory investment, which had been booming in the final months of 2021.
Exports and government spending also fell, while imports rose. Consumer spending, which is vital to the economy, increased as prices kept rising.
The price index tracking personal consumption expenditure rose 7% in the first three months of the year, or 5.2% when stripping out energy and food prices.
A second estimate of first quarter GDP growth will be published at the end of May.
Correction: An earlier version of this story incorrectly stated that the economy expanded in the first quarter of the year.
This is a developing story. It will be updated.