America’s gross domestic product (GDP) shrank in the first quarter by 1.4 percent according to data published Thursday by the Commerce Department as the trade deficit increased further as well. The contraction was the first since the nation began economic recovery from the COVID-19 pandemic.
CNBC reported that the 1.4 percent decrease in the size of the nation’s production fell short of the “conservative projection” that had been made by Dow Jones of 1 percent growth.
With the poor economic numbers continuing to come in, many Americans and experts are concerned that a recession is on the way.
When asked about the GDP report and the warning signs of impending recession later on Thursday, Joe Biden said he wasn’t worried about the situation.
Biden said although “you’re always concerned about a recession,” he is “not concerned about a recession.” He went on to say “the deal” is the economy is enjoying increased consumer spending and greater residential investment.
Biden’s remarks came during the same address in which he announced even more foreign aid for Ukraine in response to the Russian invasion of that country.
Biden unbelievably said in response to the much worse than projected GDP number that “what you’re seeing is enormous growth in the country.”
The widening trade deficit was a driving factor in the contraction of the economy in the first quarter. The growing deficit is a direct indication of weakening American production as consumer demand must be met by imported goods imports.
Inflation also continues to surge at levels not seen in decades as the Commerce Department recently estimated first quarter domestic goods prices increased 7.8 percent. Although the stock markets have held up so far in spite of the recent gloomy economic reports, the Federal Reserve appears ready to implement a series of interest rate hikes in the near future to address the ever-growing threat of inflation.
Even though it is uncertain whether interest rate increases will tame inflation, it is likely they would have a severe impact on markets and consumer financing, especially real estate purchases and refinances.