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The United States economy contracted in the first quarter, shocking many economists who believed that while growth would slow, it would not be negative. Data released by the Bureau of Economic Analysis showed the nation's gross domestic product declined by 1.4% between January and March.
It was an abrupt reversal after the U.S. economy grew by 6.9% in the final quarter of 2021 and the worst performance since the second quarter of 2020 when the nation was in the midst of a recession due to the coronavirus pandemic.
While the decline surprised many economists, they are not worried that the U.S will fall back into a recession. Instead, they expect the economy to rebound during the spring and summer as many issues that caused the downturn will get resolved.
"This is noise; not signal. The economy is not falling into recession," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote to investors, according to CNBC. "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."