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US Economy Shrinks as Recession Fears Rise

President Joe Biden: 'I'm not concerned about a recession. I mean, you're always concerned about a recession'

• April 28, 2022 1:40 pm

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The U.S. economy shrank in the first quarter of 2022 as the trade deficit widened, the first contraction since the country began its economic recovery from the pandemic.

Gross domestic product decreased 1.4 percent, according to figures released Thursday by the Commerce Department, which partially attributed the decrease to the surge of COVID-19 cases caused by the Omicron variant. The economy's performance fell short of the Dow Jones's conservative projection of 1 percent growth, according to CNBC.

A large majority of Americans worry that economic numbers like these indicate a recession on the way, CNBC reported this month.

Asked Thursday about the report and recession fears, President Joe Biden touted the increase in consumer spending and rising employment this year.

"I'm not concerned about a recession," Biden said. "I mean, you're always concerned about a recession. … But here's the deal, we also had last quarter consumer spending and business investment and residential investment increase at significant rates."

The economy's contraction was primarily driven by a widening of the trade deficit, which reached a record $1.08 trillion last year. The March trade deficit in goods was $125 billion, a sharp increase from the same time last year, when it was around $90 billion, according to MarketWatch.

The Commerce Department also found dramatic inflation in the first quarter of the year, estimating that the price of domestic purchases increased 7.8 percent.