US economy shrank by 1.5% in Q1 but consumers kept spending

By PAUL WISEMAN
AP Economics Writer

WASHINGTON (AP) — The U.S. economy shrank in the first three months of the year even though consumers and businesses kept spending at a solid pace, the government reported Thursday in a slight downgrade of its previous estimate for the January-March quarter. Last quarter’s 1.5% drop in the U.S. gross domestic product does not likely signal the start of a recession. The contraction was caused, in part, by a wider trade gap and by a slower restocking of goods in stores and warehouses, which had built up their inventories in the previous quarter for the 2021 holiday shopping season. Analysts say the economy has likely resumed growing in the current April-June quarter.