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By Kristin Myers, Editor-in-Chief

What's Happening Today

Good morning! It's Kristin with your daily morning digest.

A new report out this morning from the Bureau of Economic Analysis showed U.S. gross domestic product (GDP), a key measure of economic growth, shrank by 1.4% in the first quarter of this year (January through March) after growing 6.9% at the end of 2021.

The last time gross domestic product (GDP) fell was in the second quarter of 2020, when earlier waves of the COVID-19 pandemic caused many businesses to close temporarily, dragging down entire industries and weighing on global economies. The slowdown in economic growth raises the likelihood of another recession, which is when the economy shrinks significantly across a variety of economic indicators over a period of time, usually several months.

Though GDP fell, disposable income rose by 4.8%, while personal and business spending continued to increase. Consumer spending jumped 2.7% at the beginning of the year, while businesses continued to invest, jumping over 9% last quarter, hinting at economic optimism going forward. Consumer spending makes up a large part of quarterly GDP. Personal savings also slowed, increasing 6.6% in the first quarter, compared to a rise of 7.7% in the fourth quarter of 2021.

The international trade deficit, or the difference when a country's imports exceed its exports, spiked 17.8% to over $125 billion in March, as the U.S. saw a big jump in imports but a modest increase in exports. As global economies continue to struggle amid the pandemic, foreign demand for American-made goods has remained weaker than U.S. consumers' demand for products manufactured elsewhere.

- Kristin

Editors' Picks

Economy Shifts Into Reverse As GDP Declines 1.4% (The Balance)

Mastercard Sees Spending Soar as COVID Restrictions Fall Away (Bloomberg)

Corn and Soybeans Near Record Prices, Push Food Costs Higher (The Wall Street Journal)

Medicare Advantage Plans Often Deny Needed Care, Federal Report Finds (The New York Times)

How To Roll Over a 401(k) to a Roth IRA (The Balance)

Can I Refinance With Bad Credit? (The Balance)

How Does a HELOC Work? (The Balance)

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Off the Charts

Higher prices have eroded the pay raises many workers got during the pandemic, but this chart shows that people in some of the lowest-paying jobs are still ahead, even when increased costs for goods and services are taken into account. The inflation-adjusted average hourly wage for hotel and restaurant workers and others in the leisure and hospitality industry is 4.91% higher than in February 2020, just before the pandemic hit, according to data from the U.S. Bureau of Labor Statistics.

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Number of the Day

0 - That's how few lawmakers the president would have to persuade if he used executive power to forgive student debt, a move he is now reportedly seriously considering.

For The Balance's fourth Financial Literacy Month IG live series, we're discussing the topic of wealth and its enjoyment. Join The Balance Editor-in-Chief Kristin Myers with featured guest Teri Ijeoma, master investor and founder of Trade and Travel, on Wednesday, May 4, at 12 p.m. EST. Follow us on Instagram to get updates on The Balance's live events this month!