Washington: The US economy shrank at an annual rate of 1.4 per cent in the first quarter as effects of the Omicron surge start to show up, the US Commerce Department reported Thursday.
The latest data marks the US economy’s first contraction since the Covid-19 pandemic impacted the country in early 2020.
“In the first quarter, an increase in Covid-19 cases related to the Omicron variant resulted in continued restrictions and disruptions in the operations of establishments in some parts of the country,” the department’s Bureau of Economic Analysis (BEA) said in an “advance” estimate.
The BEA noted that government assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits to households “all decreased as provisions of several federal programs expired or tapered off.”
The decrease in real gross domestic product reflected declines in private inventory investment, exports, federal government spending, and state and local government spending, while imports — a subtraction in the calculation of GDP, increased, the report showed.
Personal consumption expenditures, nonresidential fixed investment, and residential fixed investment increased, it added.
