The US Gross Domestic Product shrank at an annual rate of 1.4 per cent in the first three months of 2022 as concerns about a recession rise.

       The news comes as President Joe Biden is trying to stave off concerns about inflation. Mr Biden mostly pinned the blame on outlying factors in a statement on Thursday.

       “While last quarter’s growth 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,” he said. Mr Biden also mentioned how consumer spending, business investment and residential investment increased.

       The US Bureau of Economic Analysis found that an increase in Covid-19 cases related to the Omicron variant caused restrictions and disruptions at businesses in some parts of the country. Similarly, government assistance such as forgiveable loans to businesses, grants to state and local governments and personal aid such as enhanced unemployment assistance and the enhanced Child Tax Credit, has dissipated. Senator Joe Manchin’s opposition to the expanded Child Tax Credit effectively killed President Joe Biden’s Build Back Better legislation, which would have continued the credit.

       Decreases in private inventory investment, exports and government spending at both the state and local levels all contributed to the decline. One of the main drivers of the decline in private inventory investment was a decrease in wholesale trade for motor vehicles and retail trade for auto dealers.

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       Decreases in nondurable goods — which includes items like gasoline, food, beverages, clothing, shoes and gasoline — contributed to the decline of exports but were offset by an increase in businesses services like financial services.

       At the same time, personal dollar income increased by $268.0 billion in the first financial quarter of 2022, mostly driven by an increase in employee compensation. But it was offset by a decrease in social spending.

       The expanded Child Tax Credit expired at the end of December 2021, which meant families did not receive payments for the first three months of 2022. The House of Representatives passed a version of Build Back Better in November that included the Child Tax Credit but Mr Manchin announced his opposition in December, effectively killing the legislation.

       Since then, talks about the Child Tax Credit have stalled.

       “I’ve worked half of my Senate career, I’ve worked on this, and I’m not stopping until we do it,” Democratic Senator Sherrod Brown of Ohio, one of the tax credit’s proponents, told The Independent on Wednesday. “My prediction is it will be as popular as Social Security once it’s up and running.”

       Personal consumption expenditures increased overall. But the jump was reflected by an increase in services like health care, while consumption of nondurable goods like gasoline and other energy declined.