(Bloomberg – The U.S. Economy unexpectedly contracted during the first quarter. A ballooning trade deficit, softer inventory growth and weaker consumer demand hid a otherwise strong picture of business and consumer demand.

Gross domestic product fell at a annualized rate after a 6.9% pace of growth at the end of 2021, the Commerce Department’s preliminary estimate showed Thursday. According to a Bloomberg poll of economists, the median estimate was for a 1 percent increase. 

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Yet, actual final sales to domestic customers, a measure indicating underlying demand, that removes trade and inventories from GDP, increased by 2.6% per year, an improvement over the 1.7% rate in the fourth-quarter.

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