U.S. First-quarter GDP Decline Revised Lower to 1.5%

  • May 26, 2022
  • Brian Turner
  • U.S. economic growth in the first quarter of 2022 was revised lower by 0.1 percentage point reflecting lowered inventories investment and higher trade deficit partially offset by higher consumer spending. Wages and salaries in the fourth quarter of 2021 were revised higher.

    U.S. GDP growth in the first quarter ending in March was revised lower to 1.5% annual rate in the second estimate from the initial projection of 1.4% by the Bureau of Economic Analysis.  

    The rise in consumer spending was pulled down by weaker estimates of corporate inventories and residential investment and larger trade deficit also trimmed the projection. 

    The downward revision is the worst since the pandemic-impacted second quarter 2020 when the GDP declined at an annual pace of 31.2%. 

    Personal Consumption Expenditure, a measure of consumer spending, was revised higher to 3.1% from 2.7% driven by strong labor market and rising wages. 

    Gross Domestic Product in current dollars increased at an annual rate of 6.5% or $381.5 billion, in the first quarter to a level of $24.38 trillion.

    In the fourth quarter current dollar GDP increased 14.5%, or $800.5 billion. 

    Real GDP growth in the fourth quarter 2021 was 6.9% and for full-year 2021 was 5.5%. 

    The bureau also revised higher Gross Domestic Income on higher than expected wages and salaries. 

    The increase in wages and salaries was revised higher by $66.6 billion to $341.0 billion in the fourth quarter lifting the real gross domestic income to 6.3% in the fourth quarter, an upward revision of 1.2 percentage points from the previous estimate.

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