Investors in the United States anticipate a big week of new economic data, including the first numbers on nationwide economic growth for the first quarter of the year, ending in March. Of course, inflation numbers will also be included in this data.
Economic activity in America is measured by the national gross domestic product. Analysts expect to see this metric grow at a steady, and minimal, annualized pace of one percent for Q1. Accordingly, the Federal Reserve Bank [of Atlanta] now forecasts a seasonally adjusted GDP annual growth rate of 1.3 percent as analyzed in the middle of April.
Obviously, this would be quite a significant drop compared to the 6.9 percent growth pace realized at the close of 2021. Furthermore, this would make the performance the worst three-month period since the initial pandemic resistance that began in Q2 of 2020.
Now, economists had originally predicted that economic growth would, indeed, eventually slow from the pace seen during the country’s reopening efforts. Unfortunately, the current growth rate of 1 percent is still disappointing, even when compared against pre-pandemic rates.
Analysts have offered a few possible reasons for this. First of all, many companies rebuilt their inventories within the fourth quarter of last year. This was likely in anticipation of a more successful reopening. Indeed, this was successful at boosting economic activity. Sadly this did not last long, flickering out within the first three months of this year.
On top of that, the quarter also started with the new coronavirus Omicron wave. This brought a surge of new infections, and yet another new set of restrictions focused on virus containment. The effects of these efforts did live long, but we are only now starting to see the longer-term effects.
Finally, Americans have also struggled, of late, to keep up with soaring consumer prices. And this was greatly exacerbated by the Russian invasion of Ukraine, which contributed to higher gas prices. Then, in March, the US Census Bureau released sales data indicating overall the market only saw a boost in gas station purchases, which grew 9 percent.