(WWLP) – Gross Domestic Product, commonly known as GDP fell by 1.4% in the first few months of this year.
22News spoke with an economics professor at AIC today to understand what this means for the economy and your wallet.
This dip came as a surprise to economic experts including Professor Rogers at AIC because the economy has seen so much growth.
Here’s why we had that decrease. Rogers told 22News it’s for two reasons. Businesses built up their inventories at the end of last year in anticipation of supply chain issues during the holidays. The other reason, which he said is concerning was the trade deficit. The U.S. imports a lot more than it exports.
John Rogers, Professor of Economics at AIC said, “Those imports aren’t produced here so they don’t contribute to our GDP. And because the rest of the world has slowed down: because of Ukraine, because of the recession in other emerging markets, and the slow down in China. There are fewer exports.”
22News asked Rogers if he sees this as a sign we’re heading into a recession. He said while there is a chance there are other economic indicators that are still going strong, like unemployment being low. Consumer spending is still strong, even with higher interest rates.