First negative growth since the second quarter of 2020… Trade deficit, corporate inventory, and financial expenditure are ‘ankle’
Detailed indicators such as consumption expenditure and corporate investment growth improved… War and containment in China are variables
(New York = Yonhap News) Correspondent Kang Geon-taek = The U.S. economy has been lagging behind in the aftermath of inflation, Russia’s invasion of Ukraine, and the novel coronavirus infection (COVID-19).
However, this result is due to technological factors, and the fact that the US economy itself is strong was confirmed by detailed indicators, the US media diagnosed.
The U.S. Department of Commerce announced on the 28th (local time) that the gross domestic product (GDP) grew at an annualized rate of -1.4% in the first quarter of this year.
The U.S. growth rate is announced three times: a preliminary figure, a provisional figure, and a fixed figure. Today’s announcement is preliminary and may be revised in the future.
This marked the end of the sixth straight quarter of positive growth for the US economy. In the fourth quarter of last year, the previous quarter, it grew 6.9%.
It is the first time since the first and second quarters of 2020, during the early stages of the COVID-19 crisis, to record negative growth.
Both Bloomberg News and the Wall Street Journal (WSJ) had projected growth rates of 1.0% in the first quarter.
It is analyzed that the unexpected negative growth is due to a deepening trade deficit, a slowdown in inventory investment by companies, and a decrease in the federal government’s fiscal spending.
The U.S. trade deficit in the first quarter broke a record-breaking record, pulling down the country’s GDP by 3.2 percentage points, CNBC and Market Watch reported.
This is difficult to interpret negatively as imports surged due to Americans’ vigorous consumption activities, while export growth slowed due to delayed economic recovery in other countries.
At the end of last year, when the supply and distribution chain was in full swing, American companies that unnecessarily increased their inventories significantly to meet the shopping season, reduced their inventory investment this year, also had a negative effect of more than 0.8% on the total GDP.
A decrease in government spending also had a negative impact on US economic growth. U.S. defense spending fell 8.5% in the last quarter.
According to Bloomberg News and The New York Times (NYT), these three factors cut GDP by more than 4 percentage points, and excluding the trade deficit and slowing inventory, the growth rate in the first quarter is positive.
Also, some view that the 1Q report of -1.4% is only a base effect compared to the previous quarter, which grew by 6.9%. Compared to the same period last year, the US economy grew 3.6%.
There are many detailed indicators that confirm the health of the US economy.
Personal consumption spending, which accounts for two-thirds of the US real economy, increased by 2.7% (annual rate) and corporate investment by 9.2% (annual rate), respectively. At the beginning of the year, despite the widespread spread of COVID-19 micron mutations, consumer spending and corporate investment increased.
Real final sales to domestic buyers, an indicator of base demand, also increased by 2.6% (annual rate), rather than in the fourth quarter of last year (1.7%).
The prospects for future economic growth in the United States are mixed.
As the strong nature of the US economy has been confirmed, there are optimism that it will rebound soon if temporary factors such as the trade deficit and slowing corporate inventories are resolved. There is no fear that
This is because war and China’s ‘zero-corona’ quarantine could further damage an already tangled global supply chain, further pushing up energy, raw material and food prices, shrinking businesses and consumers.
There is also fear that a full-scale rate hike and quantitative austerity by the Federal Reserve (Fed), which has played a vital role in suppressing inflation, may cause a full-fledged recession.
Deutsche Bank was the first to officially warn of the possibility of a recession in the US next year, and Goldman Sachs also estimated the probability of a recession in one year to be 35%.
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2022/04/29 05:08 Send