(CNN) –– The US economy slowed in the first quarter of 2022, data from the Bureau of Economic Analysis revealed on Thursday.
The nation’s gross domestic product (GDP), the broadest measure of economic activity, shrank at an annualized rate of just 1.4% between January and March.
The figure represents a marked slowdown in the growth rate of 6.9% that was registered in the last quarter of last year. In addition, it is the worst performance since the recession of the pandemic in the second quarter of 2020.
Much of the contraction was due to a drop in inventory investment, which had been booming in the final months of 2021.
Exports and public spending also decreased, while imports increased. Consumer spending, vital to the economy, increased as prices continued to rise.
The price index that tracks personal consumption spending rose 7% in the first three months of the year, or 5.2% if energy and food prices are excluded.
A second estimate of GDP growth for the first quarter will be published at the end of May.
Investors were already bracing for bad news on the economy. The expectation was that the latest GDP reading would show US economic growth plummeting to 1.1% in the first three months of the year, according to Refinitiv.
Even the Federal Reserve Bank of Atlanta’s GDPNow model forecast a seasonally adjusted annualized growth rate of just 0.4% on Wednesday. Which implied a fall of 1.3% in mid-April.