Gross domestic product in the U.S. declined at a 1.4 percent pace in the first quarter, below analyst expectations of a 1 percent gain, CNBC reported April 28.
Consumer spending rose 2.7 percent while prices climbed 7.8 percent, the report said. Some of the GDP decline came from likely temporary factors. Rising COVID-19 infections limited economic activity early in 2022, as did near-record inflation and the Russian invasion of Ukraine.
Private inventory investment decelerated, the report said, which also hampered GDP growth in the first quarter.
"This is noise, not signal. The economy is not falling into recession," Pantheon Macroeconomics Chief Economist Ian Shepherdson said, according to the report. "Net trade has been hammered by a surge in imports, especially of consumer goods, as wholesalers and retailers have sought to rebuild inventory. This cannot persist much longer, and imports in due course will drop outright, and net trade will boost GDP growth in Q2 and/or Q3."
Current market pricing suggests that after two years of near-zero rates, the Federal Reserve will raise its benchmark interest rate to about 2.75 percent by the end of 2022, the report said.