Data from the Bureau of Economic Analysis released this morning shows that the United States GDP declined at an annualized rate of 1.4% from January to March. The reversal indicates a growing concern for a possible recession as last year we witnessed strong growth.

Before you get your panties in a twist, just a measure of a single fiscal quarter does not make it a trend. However, we should be aware that it is a warning as to how recovery is currently going. A commonly used definition of a recession is two straight quarters of decline. In Q4 of 2021, there was a reported 6.9% growth pace making the most recent reports the worst since the Pandemic induced recession of Q2 in 2020. There was a prediction of 1.1% according to Refinitiv.

The decline is accredited to the decrease in inventory investment, a fall in exports and government spending, and an increase in consumer spending. The price index which tracks individual consumption rose 7% in Q1.

A hopeful second estimate of Q1 GDP growth will be released at the end of May. We are all on the edge of our seats!