WASHINGTON, D.C. — U.S. gross domestic product (GDP) decreased at a 1.4% annual rate in the first quarter of 2022, according to data estimates released by the Commerce Department. This is a marked reversal from the fourth quarter of 2021, when GDP rose 6.9%.
Patrice Onwuka, director of IWF’s Center for Economic Opportunity (CEO), issued the following statement:
“The surprising negative GDP number is unwelcome news and should be concerning for President Biden and Congress. Inflation is most certainly weighing on businesses and top of mind for American households. Despite nominally low unemployment rates, Amerians are souring on the state of the economy, evidenced in part by still-sluggish labor force participation. According to Gallup, more than three in four Americans say the economy is getting worse because of inflation and high fuel costs.
“Despite a tight jobs market and rising wages, inflation is eating away at earnings, disposable personal income, and savings. Today’s news will not improve their view of the economy, and that could lead to a pullback on spending that drags down the economy.
“The White House does not want to admit that the inflationary COVID-relief passed last year is fueling rising prices today or that its energy policies have made us less energy independent and more vulnerable to energy price volatility from foreign conflicts. Resurrecting massive federal spending plans and implementing tax increases on individuals and businesses won’t solve the inflation problem. Instead, they will rob Americans of their purchasing power even more and assuredly send us into recession.”
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