Posted on 04/28/2022 6:38:49 AM PDT by Oldeconomybuyer
WASHINGTON (AP) — The U.S. economy shrank last quarter for the first time since the pandemic recession struck two years ago, contracting at a 1.4% annual rate, but consumers and businesses kept spending in a sign of underlying resilience.
The weak showing does not mean a recession is likely in the coming months. Most economists expect a rebound in the April-June quarter as solid hiring and wage gains sustain growth.
Instead, the steady spending by households and companies suggests that the economy will likely keep expanding this year even though the Federal Reserve plans to raise rates aggressively to fight the inflation surge. The first quarter’s growth was hampered mainly by a slower restocking of goods in stores and warehouses and by a sharp drop in exports.
The Commerce Department’s estimate Thursday of the first quarter’s gross domestic product — the nation’s total output of goods and services — fell far below the 6.9% annual growth in the fourth quarter of 2021. And for 2021 as a whole, the economy grew 5.7%, the highest calendar-year expansion since 1984.
The economy is facing a range of pressures that have heightened worries about its fundamental health and raised concerns about a possible recession next year. Inflation is squeezing households as gas and food prices spike, borrowing costs mount and the global economy is rattled by Russia’s invasion of Ukraine and China’s COVID-19 lockdowns.
(Excerpt) Read more at apnews.com ...
Anyone making moves with their retirement accounts, or hanging in there?
“....kept spending....money they dont actually have.”
They all sucked, it wasn’t until Ronald Reagan and Paul Voelker came on the scene to get things turned around.
Paul Voelker was appointed by Jimmy Carter, might be the only good thing he did during his 4 years.
It may be the only time God shined down on Jimmy.
LOL - does not mean a recession, lol. Technically that is true. It takes 2 negative GDP quarters for a recession. 1Q was negative, so true, it does not mean we are in a recession. However, when 2Q is negative, it will be.
Most economists are wrong given the hard left-wing tilt they seem to display. Most economists were not predicting a negative 1Q, so why believe them when they predict 2Q will be “stronger”?
Everything the government is doing is 180 degree wrong. Inflation is still increasing, we are squeezed financially. We are squeezed politically. States are squeezed by massive illegals. Hard to see a path forward that is not a recession.
I got out of equities in my 401-k a few months ago. I feel certain things will tank very soon. Let’s Go BRANDON
Spending more and buying less
And his party of riggers
“The U.S. economy shrank last quarter for the first time since the pandemic recession struck two years ago...”
I really do not see how that is possible.
Tourism was flat out shut down
Highways were so clear in the middle of the week that kids would caravan down them at speeds in excess of 100mph.
With people going home “to work” parking garages in cities like San Francisco were closed because downtown resembled the ghost cities of China.
All the attendant companies in the downtowns had no customers. ie restaurants, dry cleaner, office supply companies, coffee and water services, etc.
I have a friend who owned 4 Auto Paint Collision centers. He closed 2 and the employees he kept were working 1/2 days.
Why? Because with no one driving on the roads there were less auto accidents.
Another friend owns a fleet of tow trucks and his guys were sitting around doing nothing as well.
I could go on detailing the number of companies who lost revenue and permanently closed because of this scam but, it amazes me that the economy grew at all or even held flat.
fortunately I haze zero bills except my cell phone, which I can’t seem to pay off and I weathered that storm.
I myself lost 75% of my income and saw that same number of colleagues permanently laid off at the same time.
I actually don’t believe it either...
This points out the fallacy that consumer spending drives the American economy — it doesn’t. Consumers can continue to spend even as production falls; especially during an inflationary period.
Eventually, should business to business spending fail to improve, consumer spending must begin to fall — assuming, of course, that Biden doesn’t send out another round of stimulus checks printed out of the proverbial thin air.
And I wouldn’t bet against that.
But what are they spending on?
From my point of view they are spending in two places, on necessities, (food and fuel) and on things like home improvement. Lots of new roofs and fences going up. Not a lot of new cars or new kitchens.
Garden supplies are being sold, landscaping not so much.
Maybe that explains what I can’t understand. They seem to have ZERO resistance to price. None whatsoever. They will not only buy an overpriced house, they will bid the price up without limit it seems.
Cars? What payment can I afford? Not what price will I willingly pay.
“Now, imagine how this article would have been written had this news come out under Trump...”
Actually, did you notice how the recession started 2 years ago, but the contraction didn’t hit until now? They DID blame it on Trump.
>> The weak showing does not mean a recession is likely in the coming months. <<
The weak showing is weak enough it’s already a recession.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.