Despite the dismal growth results, the US central bank is largely expected to raise its main rate by 0.5 percent next week to combat inflation.

According to early official data, the US economy reversed gear in the first three months of the year. Despite expectations for a much milder growth deceleration. The preliminary estimate from the Commerce Department for January to March gross domestic product (GDP) revealed a 1.4 percent annual rate decrease.

Economists expected 1.1 percent growth, down from the 6.9 percent annual rate seen in the final three months of 2021.

The consequences of rising inflation on the world’s largest economy had been projected even before Russia’s tanks stormed into Ukraine in late February. Despite the price pressure brought on by increased oil prices; the figures revealed that consumer and business expenditure remained strong over the quarter.
Consumer spending increased by 2.7 percent in the third quarter, despite a 7.8% increase in prices.
The major causes of the shrinkage, according to the department, were a slower restocking of items in stores and warehouses. As a result of the COVID-related worldwide supply disruption, and a severe decline in exports.