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Rick Santelli of CNBC said on Thursday that gross domestic product (GDP) reached a “nasty minus 1.4” in the first quarter of 2022.
During the Squawk Box, Santelli gave a brief description of the numbers for the first quarter. GDP measures the market value of all goods and services produced over a three-month period. The economy shrank unexpectedly by 1.4% on an annual basis in the first three months of 2022.
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“We haven’t had a minus sign since that nasty second quarter of COVID in 2020,” Santelli said. “The price index, fastening, 8%, 8%. That’s amazing. To find a number greater than 8%, you have to go back to 1981.”
Santelli said there were “serious” surprises in the numbers. Due to the way the Ministry of Commerce calculates GDP, the slowdown in growth and subsequent recovery can sometimes be exaggerated.
The Commerce Department building is visible ahead of an expected report on new home sales in Washington, DC, USA, January 26, 2022. REUTERS / Joshua Roberts
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Some economists predicted that the economy would grow by 1.1% in the first quarter. The number for this quarter was the worst since the spring of 2020, when the United States was in the worst episodes of the coronavirus pandemic.
The economic downturn may be due to record high inflation, supply chain shortages and labor shortages. Due to the way the Ministry of Commerce calculates GDP, the slowdown in growth and subsequent recovery can sometimes be exaggerated.
FILE PHOTO: A help sign is displayed at a fast food restaurant in Solana Beach, California, USA, November 9, 2021. REUTERS / Mike Blake / File Photo
Harvard University professor Kenneth Rogoff said Thursday that the figures were “shocking”.
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Chris Zacareli, chief investment officer of the Independent Advisor Alliance, said the figures were “a warning signal that the economy is not as strong as we all thought”.
US President Joe Biden, surrounded by Environmental Protection Agency (EPA) Administrator Michael Regan and Senior Assistant Steve Rickett, holds a meeting on infrastructure with leaders of workers and businesses at the White House in Washington, DC, July 22, 2021.
“It is possible that GDP will be revised higher next month, as this is only the first edition and there will be two revisions, but this is a warning sign,” he continued.
President Biden responded to the news by saying that “the assessment was influenced by technical factors.”
“The United States is facing the challenges of COVID-19 around the world, Putin’s unprovoked invasion of Ukraine and global inflation from a position of strength,” the president said in a statement.
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