GDP Research Brief
Disrupted Trade Stalls GDP in First Quarter,
Underpins Industrial Demand
First quarter GDP contraction not a concern. Gross domestic product fell by an annualized rate of 1.4 percent in the opening quarter of 2022. The reduction was driven predominantly by a widening trade deficit, as import volumes climbed rapidly while exports declined. With stimulus concluded, less government spending also contributed to lower GDP. Excluding these two categories, metrics were much more positive. Personal consumption and private investment both added to GDP last quarter, and domestic purchasing, adjusted for inflation, also increased by 2.6 percent. These figures underscore that the economic foundations of consumption and investment continue to expand, even as international trade faces ongoing hurdles.