Economic activity is on track to post a much slower growth rate in this year’s first quarter, based on preliminary estimates for the gross domestic product (GDP).

After a blowout gain in Q4, US macro momentum is projected to decelerate dramatically in the first three months of 2022, according to the median estimate for a set of nowcasts compiled by CapitalSpectator.com. It’s still early in the quarter and so the current outlook should be viewed cautiously. Incoming data in the weeks ahead will undoubtedly bring revisions to the Q1 profile. But at the moment, GDP growth is expected to post a sharply softer gain compared with the final quarter of 2021.

The current median Q1 nowcast is a relatively modest 1.9% increase (seasonally adjusted annual rate). That’s far below Q4’s sizzling 6.9% advance.

Forecasting the forward path for the economy is always uncertain, but the task is unusually challenging lately. Several factors are creating an especially tricky terrain: the ongoing pandemic, surging inflation, rapidly changing expectations for monetary policy, and heightened geopolitical risk linked to a possible war in Ukraine.

For now, economists generally are downgrading expectations for Q1 vs. the previous quarter. “The US economy for the current quarter looks weaker now than it did in November, according to 36 forecasters surveyed by the Federal Reserve Bank of Philadelphia,” the bank reported earlier this week.

A business survey published last week advised that the implied estimate for US economic activity in January reflects a conspicuous slowdown. “The US economy has been hit hard by the Omicron variant at the start of 2022, with growth faltering to the weakest for 18 months to signal a near-stalling of the recovery,” says Chris Williamson, a chief business economist at IHS Markit. “All broad sectors of the economy reported the business activity to have been adversely affected by the surge in virus cases, though the slowdown was led by the sharpest drop in activity for consumer services recorded since December 2020 as virus-related health protection measures were tightened to the highest since May of last year.”

The potential for stronger economic activity in February and March can’t be ruled out if the pandemic eases. That seems to be a possibility, based on rapidly falling US cases of Covid-19 and hints that the number of fatalities is peaking. But for now, there’s a strong case for managing expectations for Q1 GDP growth down to some degree relative to Q4.