A state’s gross domestic product – the broadest measure of economic activity – declined at an annual rate of 1.4% between January and March in a surprising reversal of strong growth last year.
While one quarter isn’t trending yet, it’s a warning sign of how the recovery might unfold: Two consecutive quarters of declining growth meet a popular definition of stagnation.
Much of the decline is due to lower inventory investment, which was booming in the final months of 2021.
Exports and government spending also fell, while imports rose. Consumer spending, which is vital to the economy, increased as prices continued to rise.
The price index that tracks personal consumption expenditures rose 7% in the first three months of the year, or 5.2% when energy and food prices are excluded.
A second estimate of first-quarter GDP growth will be published at the end of May.
Correction: An earlier version of this story incorrectly stated that the economy expanded in the first quarter of the year.
This is an evolving story. It will be updated.
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