CNBC’s Rick Santelli said Thursday that the Gross Domestic Product (GDP) came in at a “nasty minus 1.4” in the first quarter of 2022.
During an appearance on “Squawk Box,” Santelli gave a run down of the first quarter numbers. The GDP measures the market value of all the goods and services produced in a three-month period. The economy shrank unexpectedly by 1.4% on an annualized basis in the first three months of 2022.
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“We haven’t had a minus sign since that nasty second quarter, COVID related, in 2020,” Santelli said. “The pricing index, buckle up, 8%, 8%. That is unbelievable. To find a higher number than 8% you have to go back to 1981.”
Santelli said that there were “serious” surprises in the numbers. Because of the way the Commerce Department calculates the GDP, the decline in growth and the subsequent rebound can sometimes be exaggerated.
The Department of Commerce building is seen before an expected report of new home sales numbers in Washington, U.S., 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. This quarter’s number marked the worst since Spring 2020, when the U.S. was in the worst throes of the coronavirus pandemic.
The economy’s downturn can be attributed to record-high inflation, supply chain shortages and labor shortages. Because of the way the Commerce Department calculates the GDP, the decline in growth and the subsequent rebound can sometimes be exaggerated.
FILE PHOTO: A help wanted sign is shown at a fast food restaurant in Solana Beach, California, U.S. November, 9, 2021. REUTERS/Mike Blake/File Photo
Harvard University professor Kenneth Rogoff said Thursday that the numbers were “shocking.”
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Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said that the numbers were a “a wake-up call that the economy isn’t as strong as we all thought.”
U.S. President Joe Biden, flanked by Environmental Protection Agency (EPA) Administrator Michael Regan and senior aide Steve Ricchetti, holds a meeting on infrastructure with labor and business leaders at the White House in Washington, U.S. July 22, 2021.
“It’s possible that GDP gets revised higher next month, as this is just the first release and there will be two revisions, but it is a warning sign,” he continued.
President Biden responded to the news by saying that the “estimate was affected by technical factors.”
“The United States confronts the challenges of COVID-19 around the world, Putin’s unprovoked invasion of Ukraine, and global inflation from a position of strength,” the president’s statement said.
