US economy unexpectedly contracts in Q1

ANKARA

The US economy unexpectedly contracted 1.4% year-on-year in the first quarter of 2022, the Commerce Department's first reading of the data showed on Thursday.

Market had estimated gross domestic product (GDP) to rise at an annual rate of 1.1% from January to March.

In the fourth quarter of 2021, the real GDP increased 6.9%, it said.

"The decrease in real GDP reflected decreases in private inventory investment, exports, federal government spending, and state and local government spending, while imports, which are a subtraction in the calculation of GDP, increased," the department said in a statement.

The US economy is still struggling with a weak labor market and high unemployment.

While the Fed kept its benchmark interest rate unchanged on Wednesday, it reaffirmed not to make a rate hike until 2023 and to continue its asset purchase program until full employment and economic recovery are achieved.