GDP Report Shows the U.S. Economy Shrank but strong consumer spending and continued business investment suggested that the recovery remained resilient.*
The decline was mostly a result of the two most volatile components of the quarterly reports: inventories and international trade. Lower government spending was also a drag on growth. Measures of underlying demand showed solid growth.
Most important, consumer spending, the engine of the U.S. economy, grew 0.7 percent in the first quarter despite the Omicron wave of the coronavirus, which restrained spending on restaurants, travel and similar services in January.
"Consumer spending is the aircraft carrier in the middle of the ocean — it just keeps plowing ahead," said Jay Bryson, chief economist for Wells Fargo.
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