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Imports soared 17.7% while exports fell by 5.9%.
The Commerce Department reported that the US gross domestic product (GDP) declined at an annualized rate of 1.4% in the first quarter of 2022, marking the first drop since the beginning of the pandemic.
The shrinkage of the US economy likely stemmed from the soaring U.S. international trade deficit which was reported $113 million in the first quarter, in goods trade, versus $87 billion in same quarter, one year ago.
The trade deficit decreased the GDP by 3.2 percentage points. In addition to this, a decline in government spending and inventory stockpiles also contributed to the fall.
The massive government stimulus spending had helped the GDP increase to 5.7% for the full year, in 2021, making it the largest gain since 1984.
Prices increased sharply during the first quarter, with the GDP price index deflator rising 8%, following a 7.1% jump in Q4.
Despite the downgrade in the overall GDP in the first quarter, consumer spending rose at a 2.7% rate, up from 2.5% in the fourth quarter.
Business spending on equipment, jumped 15.3%, with builders increasing their investment in new housing.
Imports soared 17.7% while exports fell by 5.9%. Government spending fell at a 2.7% clip in the first quarter.
Inflation rose at an annualized rate of 7%, the highest since 1981.
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Source: Bureau of Economic Analysis