Economy shrinks in 46 states in the first quarter of 2022 as U.S. economy slows

The Bureau of Economic Analysis (BEA) has released figures for Gross Domestic Product (GDP) by state for the first quarter of 2021:

Real gross domestic product (GDP) decreased in 46 states and the District of Columbia in the first quarter of 2022, as real GDP for the nation decreased at an annual rate of 1.6 percent…The percent change in real GDP in the first quarter ranged from 1.2 percent in New Hampshire to –9.7 percent in Wyoming…

Minnesota’s economy was one of the 47 which contracted in the first quarter of this year, by 0.5%, or an annualized rate of 2.0%. This ranked our state 31st for economic growth that quarter, as Figure 1 shows.

Figure 1: Real GDP change, Q1:2022

Source: Bureau of Economic Analysis and Center of the American Experiment

This comes in the context of a fall in GDP in real, inflation adjusted terms for the United States of 1.6% at an annual rate in the first quarter. Sadly, there seems to be further bad news on the horizon. The Atlanta Fed announced last week:

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2022 is -2.1 percent on July 1, down from -1.0 percent on June 30. After this morning’s Manufacturing ISM Report On Business from the Institute for Supply Management and the construction report from the US Census Bureau, the nowcasts of second-quarter real personal consumption expenditures growth and real gross private domestic investment growth decreased from 1.7 percent and -13.2 percent, respectively, to 0.8 percent and -15.2 percent, respectively.

Two quarters of negative economic growth — and negative growth is a weird way of saying “it shrank” — is the technical definition of a recession. What will Minnesota’s second quarter figures say?