US trade deficit jumps to record high amid Russia-Ukraine war

Washington [US]: US Gross Domestic Product contracted by 1.4% in the first quarter of this year, the Commerce Department said Thursday in a preliminary estimate for the period which compared with a growth of 6.9% in the fourth quarter of 2021.

"Real gross domestic product (GDP) decreased at an annual rate of 1.4 per cent in the first quarter of 2022 " the Bureau of Economic Analysis, a unit within the Commerce Department, said in a press release.

Economists surveyed by US media had projected a 1.0 per cent reading for the first quarter. The department issues three GDP readings altogether for each quarter.

"Inflation is running far too high, and I am acutely concerned about this. Russia's invasion of Ukraine will add to inflation pressure, not only hiking oil and gas prices but other commodities, like wheat and fertilizer, as well," said Harker, a Policy Maker at US Central Bank, in a statement earlier.

The decrease in private inventory investment was led by decreases in wholesale trade (mainly motor vehicles) and retail trade. Within exports, widespread decreases in nondurable goods were partly offset by an increase in "other" business services (mainly financial services).

The increase in personal consumption expenditures (PCE) reflected an increase in services (led by health care) that was partly offset by a decrease in goods.

The increase in nonresidential fixed investment reflected increases in equipment and intellectual property products.
The price index for gross domestic purchases increased 7.8 per cent in the first quarter, compared with an increase of 7.0 per cent in the fourth quarter. The PCE price index increased 7.0 per cent, compared with an increase of 6.4 per cent. Excluding food and energy prices, the PCE price index increased 5.2 per cent, compared with an increase of 5.0 per cent.

Current-dollar GDP increased 6.5 per cent at an annual rate, or $379.9 billion, in the first quarter to a level of dollar 24.38 trillion. In the fourth quarter, GDP increased by 14.5 per cent, or dollar 800.5 billion.

Current-dollar personal income increased by dollar 268.0 billion in the first quarter, compared with an increase of dollar 123.9 billion in the fourth quarter. Disposable personal income increased by dollar 216.6 billion, or 4.8 per cent, in the first quarter, compared with an increase of dollar 20.1 billion, or 0.4 per cent, in the fourth quarter.

Real disposable personal income decreased by 2.0 per cent, compared with a decrease of 5.6 per cent.
Personal savings was a dollar of 1.21 trillion in the first quarter, compared with dollar 1.39 trillion in the fourth quarter. (ANI)