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First-quarter GDP declined 1.5%, worse than thought; jobless claims edge lower

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An ad for ‘We’re hiring! A sign reading “We’re Hiring!” is displayed at Los Angeles Starbucks.

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As a result, U.S. GDP fell more than expected to begin the year.

According to the IMF, GDP fell 1.5% annually in the first quarter. the second estimateFrom the Bureau of Economic Analysis. It was much worse than 1.3% Dow Jones estimates and an estimate that the Bureau of Economic Analysis had written down. initially reported 1.4%.

Both residential investment and private inventory saw downward revisions, which offset an upward trend in consumer spending. The GDP was also affected by a growing trade deficit.

In the quarter that ended in a decline in GDP, this was the worst quarter since 2020’s pandemic-ravaged Q2 in which the U.S. plunged into a recession triggered by an economic shut down ordered by the federal government to combat Covid-19. In that quarter, GDP fell 31.2%.

Most economists expect that the U.S. will rebound in the second half of this year as the early factors that impeded growth slow down. The omicron variant saw activity slow down, the Russian attack on UkraineInflation rose to its highest point in 40 years due to problems with supply chains.

CNBC’s Rapid UpdateSurvey shows that the median expectancy of growth for the second quarter is 3.3%; Atlanta Fed GDPNowThe tracker indicates a rebound as well, though at a slower 1.8% pace.

Resilient consumers fighting for growth are one of the key factors to driving growth inflation than accelerated 8.3%From April last year.

The 3.1% increase in consumer spending was better than the initial 2.7% estimate. This is because the labor market remains strong, wages are rising rapidly but still at a slower pace than inflation.

The initial jobless claims in the week ending May 21 were 210,000, a decline from 218,000 the prior week. the Labor Department reported.

The week ended May 14 saw continued claims rise to 1.35 million, despite remaining at their lowest levels since 1969.

Correction.

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